Ramesh Singh Summary: Services Sector-2 | Indian Economy for UPSC CSE PDF Download

Space

• Evolution of India's Space Programme: Over the last fifty years, India's space endeavors have significantly expanded from basic mapping services in the 1960s to a diverse range of applications today. These include the creation of launch vehicles, satellites for various purposes like earth observation, telecommunications, navigation, meteorology, and space science, as well as recent ventures into planetary exploration.
• Current Position: In 2019-20, India allocated around USS 1.5 billion to its space programs, although this amount is notably less compared to leading nations like the United States and China. India typically launches about 5-7 satellites yearly, with a high success rate. However, Russia, the United States, and China have launched significantly more satellites in recent years.
• Key Focus Areas: India's space initiatives concentrate on satellite communication (utilizing the INSAT/GSAT system), earth observation for weather forecasting and disaster management, and satellite-based navigation systems.
• Changing Landscape: The global space sector is undergoing rapid transformations, with a shift towards increased involvement of non-governmental entities for commercial purposes. Space technology is also increasingly utilized for national security objectives by various countries.
• Commercialization Efforts: India's space program, led by ISRO (Indian Space Research Organisation), has made notable strides and is now focusing on commercialization. The government has initiated steps to involve the private sector in space activities, aiming to enhance India's technological capabilities and self-sufficiency.
  
  

Manufacturing vs Services

• All the attention on India's manufacturing exports has diverted focus from another significant development in recent years: the transformation of India's services exports.
• India's share of global services exports, which had been rising, has now stabilized.
• It's puzzling because despite India's services exports being more favorable than its manufactured goods exports, the slowdown in Asia, where more of the latter goes, should have impacted India more.
• In 2015, the rupee depreciated against the dollar, a factor that should have boosted India's services exports.
• These changes have implications for India's long-term growth potential, which necessitates a rapid increase in exports to achieve a growth rate of 8-10%.
• Comparing India's services export growth with China's manufacturing export growth reveals the challenge India faces in significantly increasing its global market share in services.
• For India to match China's export trajectory, its services exports need to capture nearly 15% of the world market share, a substantial task requiring a concerted effort to enhance competitiveness.

• Global Negotiations

  • India aims to establish itself as a significant player in global services trade.
  • To boost the export of services, the government has implemented various policy measures:
    • SEIS (Service Exports from India Scheme) is designed to enhance exports of specified services from India.
    • Organizing GES (Global Exhibitions on Services) and SCs (Services Conclaves) are part of these initiatives.
  • Additionally, specific actions have been taken in sectors like tourism and shipping to support this objective.
  • Recognizing the potential of India's services exports, negotiations in the services sector are crucial for India at both global and regional levels.

Some recent negotiations include multilateral, bilateral, and regional discussions:

India has recently signed comprehensive bilateral trade agreements involving services with countries like Singapore, South Korea, Japan, and Malaysia. Additionally, an agreement on services and investment was made with the Association of Southeast Asian Nations (ASEAN). Regional Participation: While India engaged in the Regional Comprehensive Economic Partnership (RCEP) negotiations, it eventually opted out due to specific sectoral concerns and requests for relaxation in certain areas.

• The proposed Free Trade Agreement (FTA) involves the 10 ASEAN countries and its six FTA partners, which are Australia, China, India, Japan, South Korea, and New Zealand. If India had joined, it would have been part of the only large regional FTA it was a member of.
• India is actively participating in bilateral FTA negotiations that include trade in services with various countries such as Canada, Israel, Thailand, the EU, the EFTA (European Free Trade Association), Australia, and New Zealand. Additionally, India is in discussions with the United States under the India-US Trade Policy Forum, with Australia including an early harvest scheme signed in late 2021, with China through the India-China Working Group on Services, and with Brazil under the India-Brazil Trade Monitoring Mechanism.