India requests for arbitration with Australia under WTO rules on services trade issue

New Delhi: India has sought arbitration proceedings under the WTO rules against Australia to resolve an issue with regard to services sector, as it could impact New Delhi's trade in services, an official said. The official said India has already communicated to the World Trade Organisation (WTO) regarding its request for arbitration on the issue. On November 17, 2023, Australia notified to the secretariat of the WTO about its intention to modify its schedule of specific commitments under the GATS (General Agreement on Trade in Services) to incorporate additional commitments relating to services domestic regulation. GATS is a WTO agreement that came into force in 1995.

India is a member of the Geneva-based organisation since 1995. WTO is a global tarde watchdog and adjudicates trade disputes among member nations. As an "affected member", India has stated that Australia's intended modification of its specific commitments does not satisfy certain conditions, the official said. "Thereafter... India and Australia entered into negotiations with a view to reaching an agreement. The period to conclude these negotiations was extended by mutual agreement until 19 April, 2024. However, no agreement could be reached. India, hereby, requests arbitration proceedings with Australia," the official said.

In February in Abu Dhabi, Over 70 WTO nations agree to take additional obligations under the General Agreement on Goods in Services (GATS) to ease non-goods trade among themselves and extend similar concessions to all other members of the WTO. These obligations under their schedules in GATS seek to mitigate unintended trade restrictive effects or measures relating to licensing requirements and procedures, qualification requirements and procedures, and technical standards among themselves. It will also benefit Indian professional companies which will now have equal opportunity to access markets in these 70 countries, if they meet the standards.

As per estimates, the move will help reduce services trade costs by 10 per cent for lower-middle income economies and 14 per cent for upper-middle income economies, with overall savings of $127 billion. WTO disputes can be resolved through the arbitration process. Another official said the arbitrator will decide the quantum of impact it would have on India.