May 15, 2019

India has found problems with the current methodology of Services Trade Restrictiveness Index (STRI) as it shows Indian services sector as highly restrictive in areas such as FDI.

About STRI: 

  • Launched in: 2014. 

  • Launched by: The Organisation for Economic Cooperation and Development (OECD).

  • Objective: It ranks countries based on their services trade policies.

  • Coverage: The STRI is now available for 2018 for a total of 45 economies (36 OECD and the rest non-OECD) and 22 sectors. These countries and sectors represent over 80% of global trade in services.

Grievances by India:

  • A study commissioned by the Commerce Ministry has found that this index has a large number of design issues that render it impractical for use.

  • For example, the index seems to show the Indian services sector as one of the most restrictive, particularly in policy areas like foreign entry. This seems surprising as since 1991, the one area that has seen maximum liberalisation in India is FDI.

  • India has approached several developing countries during the recently-concluded WTO talks in New Delhi to try to build consensus around the new method of measuring trade restrictiveness in the services sector.

Source : The Hindu