Arpita Mukherjee Ramneet Goswami January 2009 - icrier

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Foreword With liberalization and privatization, energy services is now an important component of international trade and trade agreements. This study, sponsored by the Department of Commerce, Government of India, examines India’s prospects of liberalizing energy services within the WTO framework, identifies barriers to trade and recommends possible negotiating strategies for the government in the on-going Doha Round. The study comes out with specific policy recommendations which, if implemented, would strengthen the global competitiveness of this sector and enable India to meet the challenges and opportunities arising from trade liberalization under the GATS. Although extensive research has been conducted on the energy sector of India, there are hardly any studies on India’s trade potential in energy services. This study aims to fill that lacuna. The study found that India has both export and import interest in energy services and we are facing various barriers in markets of export interest. Therefore, India should offensively push for liberalizing this sector in the Doha Round. Given the importance of energy for the growth of the economy and trade policies, I am hopeful that this paper will provide significant inputs to policy makers, negotiators, industry and academicians working toward realizing the potential of this sector. <strong>January</strong> 28, <strong>2009</strong> i (Rajiv Kumar) Director & Chief Executive
Abstract Energy plays a vital role in the development of any economy and given its unequal distribution trade in energy, especially fossil fuels, is an important component of international trade. In the past, due to its public good characteristics, energy-related services were mostly supplied by the government. With liberalization and globalization the sector underwent significant transformation. Many new services developed and large multinationals emerged which increased global trade in energy services. Energy services is now an important component of all trade agreements. In the above context, this paper examines India’s opportunities and constraints to trade in energy services within the GATS framework. The study found that India has the capability of exporting high-skilled manpower at competitive prices but is facing various market access, discriminatory and regulatory barriers in markets of export interest. With the entry of energy- producing countries such as Saudi Arabia into the WTO, the Doha negotiations provide an important platform to offensively push for liberalization in this sector. India needs foreign investment, technical know-how and international best practices in energy. The country has progressively liberalized this sector and there are no major entry barriers. However, India has not been successful in attracting large foreign investment and technology. This is due to various domestic barriers which make it difficult to set up a competitive operation. The study lists the reform measures which will help the sector become globally competitive, protect the interests of consumers and meet the energy needs of society. Since this sector is sensitive and is closely monitored by governments across the world, government-to-government collaborations would ease the entry process for Indian companies in foreign markets, diversify our energy resource base and improve energy security. _____________________________________ JEL Classification: F13, F14, L71, L72, L94, L95, Q4 Keywords: GATS, Energy, Trade, India & the WTO ii
Page 1 and 2: Working Paper No. 231 Trade in Ener
Page 3: List of Tables Table 2.1: World Lea
Page 7 and 8: Abbreviations AERB Atomic Energy Re
Page 9 and 10: Units Units Full Form Remarks BkWh
Page 11 and 12: can be further divided into Renewab
Page 13 and 14: W/120 CPC No. Description 1.F.h 883
Page 15 and 16: The top five coal producing and con
Page 17 and 18: Table 2.10: Five Largest Natural Ga
Page 19 and 20: Nuclear energy accounts for almost
Page 21 and 22: developing countries including Indo
Page 23 and 24: production. By the end of 2001, pri
Page 25 and 26: 2.1.4 Renewable Energy The need to
Page 27 and 28: The impact of privatization varied
Page 29 and 30: agreements. Countries have formed g
Page 31 and 32: accounted for about one-quarter of
Page 33 and 34: petroleum products grew at the rate
Page 35 and 36: India is the leading country in Asi
Page 37 and 38: economy was dependent on non-commer
Page 39 and 40: Prior to Independence, the Indian o
Page 41 and 42: within each sector. Three technolog
Page 43 and 44: other stakeholders keeping in view
Page 45 and 46: 1.F.m 8675 Related scientific and t
Page 47 and 48: 3.3 Trade in Energy Services Econom
Page 49 and 50: State India Limited, Shell Hazira G
Page 51 and 52: implementation agreement for the Pu
Page 53 and 54: In December 2006, the US Congress p
Page 55 and 56:
3.4.1.1 Coal Although India has one
Page 57 and 58:
3.4.1.3 Renewable Energy One major
Page 59 and 60:
due to lack of policy clarity. 160
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adversely affected India’s trade
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important mode for trade in this se
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Accordingly, WTO members made bilat
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emove or substantially reduce MFN e
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4.3 India’s Negotiating Strategy
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unbound for pipeline transportation
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The energy sector has long been und
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for identified technologies. Indian
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There should be new regulations whi
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sector, the government should set u
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Conclusion Given the unequal distri
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Bibliography Artemiev, I, and M. Ha
Page 85 and 86:
Ministry of Commerce and Industry (
Page 87 and 88:
Iran Daily, ‘India Approves TAPI
Page 89 and 90:
http://powermin.nic.in/indian_elect
Page 91 and 92:
providers to enter and operate in d
Page 93 and 94:
Table B 3: World Top Natural Gas Ex
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efficiency. 188 The ECT also includ
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Coal, Energy Efficiency and Conserv
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1. Coal The Ministry of Coal is the
Page 101 and 102:
Table E 1: India’s Nuclear Reacto
Page 103 and 104:
W/120 CPC No. 1.F.e 8676 (partial)
Page 105 and 106:
NO. TITLE 230 229 228 227 226 225 2
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Arpita Mukherjee Ramneet Goswami January 2009 - icrier

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