Services may land sops in trade policy

NEW DELHI: The government may give incentives to the services sector battling the global downturn in demand in the foreign trade policy to be announced next month, commerce and industry minister Anand Sharma has said.

���We are talking to the services sector. I am sure it (FTP) will address the short-term challenges (of the sector),��� Mr Sharma said in a seminar on Friday. He added that the government would help the industry to increase services exports.

Due to shrinking demand in the global markets and the pressure on prices, growth projections for the IT and the BPO sectors have already been lowered for the on-going fiscal. Industry body Nasscom has lowered IT growth projection to about 4%-7% and BPO growth projection to 15%-18%. The relatively low growth projections are despite the fact that domestic demand is high as the dip in exports is likely to continue. India���s services exports in 2007-08 was valued at $ 90 billion.

The minister added that the services sector should try to diversify export market instead of traditional markets like the US and the European Union. ���There has to be diversification in addition to the traditional destinations and we are advising the industry to explore the emerging markets (and) focus on Africa and Latin America in addition to looking at Far East,��� he said.

India���s has 2.7% share in the global services market and hopes to increase in to 4% in the next few years. The government is trying to negotiate mutual recognition agreements (MRAs) with all countries with which it is exploring bilateral trade agreements. MRAs allow countries to recognise each other���s professional qualifications making it easier for service providers to work in the other country.