Service sector liberalisation in India: Key lessons and challenges

Abstract

The service sector is one of the fastest-growing sectors in the Indian economy. It has been integral to India’s overall liberalisation and structural reform programme, which was initiated in the 1980s and gained momentum after 1991. The increasing significance of India’s service sector has, however, raised issues and concerns that need to be addressed domestically, in consultation with relevant stakeholders, and externally, in consultation with key trade and investment partners. Overall, the paper reflects that the market structure and domestic policies and frameworks have shaped the pace and extent of liberalisation across different services in India. To be successful, liberalisation has to be supported by regulatory and legislative reforms, and a strengthening of regulatory and enforcement capacity. Instituting appropriate regulatory bodies, clearly defining their roles and improving governance are just as important as pursuing liberalisation.