Report

T OURISM AND TRAVEL RELATED SERVICES 121
limitation. However, the development of Internet and
e-commerce has brought this into question, as these
tools are increasingly used to make online bookings,
enquiries and marketing. An ENT is frequently required
for opening new bars or restaurants; citizenship
requirements are sometimes imposed for liquor licenses
and tourist guide licenses. Mode 3 is restricted to fixed
equity limits and Mode 4 is usually unbound implying
that foreign service providers are not allowed entry into
the host markets.
Liberalisation of tourism services is highly dependent
on commitments made in other related sectors in
particular transport services and others such as financial
services (insurance, foreign exchange transactions),
software services (computer reservation systems, billing,
payments, etc.), distribution services and various
business services (Kumar 2005). Thus while tourism
services have witnessed more extensive coverage and
more liberal offers than other services sectors, given
their strong complementarity with other services,
restrictions in these related services also influence the
actual extent of liberalization in tourism services.
South Asia being one of the poorest regions in the
world it has special interest in tourism and travel
services in view of this sector’s capacity to provide
employment at all skill levels. Tourism is not really a
sector but rather an agglomeration of crosscutting
sectors, one of its appealing factors being its linkage to
other sectors and activities.
India
CHARACTERISING SAFTA COUNTRIES’
COMMITMENTS/INITIAL/REVISED OFFERS
Out of the four subsectors of the tourism and travelrelated
services sector India has offered to undertake
commitments in three subsectors, namely hotels and
other lodging services (CPC Ex. 641); travel agencies
and tour operators services (CPC 7471); and tourist
guides services (CPC 7472).
Though India’s commitments cover a wide range
of tourism services, still there are some services such as
full restaurant services, self-service facilities, catering
services, beverage serving services, etc., that have not
been committed. However, its coverage in travel
agencies and tour operators’ services and tourist guides
services is full.
In its sectoral commitments in the Market Access
column India has put no restriction under Modes 1
and 2 for hotels and other lodging services and travel
agencies and tour operators services. Under Mode 3
the entry is only through incorporation and subject to
the condition that in the case of foreign investors having
prior collaboration in these services in India, FIPB
approval would be required. Mode 4 is unbound except
as in the horizontal section. In the National Treatment
column Modes 1, 2, and 3 are without any restrictions
whereas Mode 4 refers to the horizontal section. For
tourist guides services while Mode 1 is unbound albeit
due to lack of technical feasibility and Mode 2 are
without any restrictions, Mode 3 has the same
restrictions as in the case of other tourism subsectors.
However, Mode 3 is subject to additional restriction
that there is a ceiling of 500 tourist guides conversant
in Chinese, Spanish, Portuguese, French and Japanese.
Mode 4 commitment for tourist guides services is indeed
quite liberal as it mentions that there are no restrictions
for the tourist guides conversant in Chinese, Spanish,
Portuguese, French and Japanese languages though
subject to a total ceiling of 500. For other tourist guides
Mode 4 is unbound except as in the horizontal section.
In the National Treatment column while Mode 1 is
unbound on account of technical infeasibility, Modes
2 and 3 are without any restrictions, Mode 4 is unbound
and refers to the horizontal section. In the horizontal
section, India has taken very meaningful market access
commitments for the entry of contractual services
suppliers and independent professionals in hotels and
restaurant, travel agencies and tour operators services.
The only requirement these service providers have is
that apart from following usual visa formalities they
must have proof of contract and they have to possess
requisite educational and professional qualifications
relevant to the service to be provided including work
experience.
In the National Treatment column there are some
general limitations on Mode 3 such as in case of
collaboration with public sector enterprises as joint
venture partners, preference in access will be given to
Foreign Service suppliers which offer the best terms
for transfer of technology. Taxation laws for domestic
and Foreign Service suppliers shall apply as per the
provision of the Income Tax Act, 1961. Finally,
subsidies, where granted, shall be available only to
domestic service suppliers.
From South Asia, Sri Lanka has made a request on
India to offer full commitments under Market Access
and National Treatment columns in Modes 1, 2, and 3
in hotel, restaurant and catering services (Taneja et al.
2004). As already noted, while India has not offered
any commitments in restaurant and catering services,