Report

122 QUANTIFICATION OF BENEFITS FROM ECONOMIC COOPERATION IN SOUTH ASIA
in hotel services it has offered almost the same commitments
as requested by Sri Lanka. Sri Lanka has special
interest in restaurant and catering services as there are
some small Sri Lankan motels in India (Chennai) which
mainly cater to Sri Lankan tourists, pilgrims, patients,
businesspersons, etc. It has been suggested that there is
significant scope for Sri Lankans to invest in motels in
India in renowned hospitals in the Southern region and
in Buddhist circuits such as Bodhgaya.
Tourism is an important services industry in India.
In recent years India has taken a number of initiatives
to attract foreign tourists. Global and private agencies
have been entrusted with the task of selling India to
international visitors. The Ministry of Tourism has also
made efforts notable among them being the ‘Incredible
India’ spirituality campaign that won the PATA Gold
Award. It has also been suggested that there has been a
marked improvement in the Government of India’s
approach to tourism (WTTC 2003–04).
In the South Asian region unlike Sri Lanka, India
does not provide visa-on-arrival. However, outbound
travel from Sri Lanka to India has been facilitated since
India has offered visa-free travel to groups travelling
on pilgrimage (ESCAP 2005). During 2001–03 Sri
Lanka was the third largest country in terms of sending
tourists to India.
Summary of Restrictions in the
Indian Tourism Sector
• No commitments in restaurant and catering services
• In all three committed subsectors under Mode 3
FDI only though incorporation and in the case of
foreign investors having prior collaboration in these
two subsectors, FIPB approval is required
• No sectoral Mode 4 commitments in hotel and
lodging and travel agencies and tour oprerators
services
• No commitments under Mode 1 in tourist guides
services
• Unlike Sri Lanka, India does not offer visa-onarrival
to tourists from SAARC counties though it
offers visa-free travel to groups traveling on
pilgrimage from Sri Lanka.
Pakistan
During the Uruguay Round Pakistan undertook
commitments in two of the four subsectors of the
tourism and travel related services sector – hotels and
restaurants (including catering) (CPC 614–643) and
travel agencies and tour operator services (CPC 7471).
In these two sub-sectors Pakistan has proposed some
improvements in its initial offer (for details see table B
in chapter 6). While India’s commitments – as proposed
in its revised offer – are wider covering three sub-sectors
of the tourism sector, Pakistan’s commitments in the
sub-sector – hotels and restaurants (including catering)
cover more services than that of India because India
has left restaurants (including catering) services.
Pakistan’s sectoral commitments in tourism services
are relatively liberal, as it has not put any limitations
in Modes 1, 2, and 3 in the Market Access as well as
National Treatment columns in both the subsectors that
have been committed. However, Mode 4 in all cases is
unbound and refers to the horizontal section where this
mode is partially open for movement of natural persons.
Though tourism companies will directly benefit from
the easy entry provisions for the categories of employees
like ICTs (managers, executives, specialists), they will
also benefit from the liberal entry conditions given for
business visitors (business persons and service sales
persons). Further, as the entry of professionals and
independent professionals is allowed they will facilitate
supply of tourism services though entry of independent
professionals seems to be limited to imparting training.
However, the entry of persons having other skills seems
to be the most important provision under Mode 4
because it specifically mentions about the delivery of
tourism services albeit limited to imparting training.
From the analysis of the Pakistani commitments in
tourism services it is clear that though Modes 1, 2, and
3 have been made fully liberal Mode 4 remains relatively
restrictive. This is important because all other countries
from the South Asian region would be looking at
Pakistan as a major market. In this regard, Pakistan
should take more liberal commitments to allow various
categories of persons working in the tourism industry.
In addition, Pakistan should either remove (the condition
of labour market test as given in its commitments
for persons having other skills or it should make the
criteria of the test fairly transparent. Pakistan and other
South Asian countries both would gain from a liberal
Mode 4 regime in Pakistan.
In addition, Pakistan ought to include travel agencies
and tour operators services (CPC 7471) in its
commitments. This sub-sector seems to be quite important
for other SAARC countries which are potential
providers of these services. This will also help Pakistan
in mobilising adequate resources to provide standard
services in this sub-sector.
The tourism industry has been relatively small
compared with other industries, but its role in the