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OECD STRI Index: India Ranked 47 ; Japan and UK gained 1st two Spots

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India rises on OECD indexIndia ranked 47th in OECD’s (Organisation for Economic Cooperation and Development) report titled ‘OECD Services Trade Restrictiveness Index (STRI): Policy trends up to 2023’, which highlights the key outcomes of the 2022 OECD STRI.

Key Points:

i.India’s rank of 47 among 50 countries shows the presence of more market restrictions in the country.

ii.OECD STRI index covers 38 OECD members, as well as Brazil, China, India, Indonesia, Kazakhstan, Malaysia, Peru, Russia, Singapore, South Africa, Thailand, and Vietnam.

iii.Russia, Thailand and Indonesia are the three countries ranked below India.

iv.On average, Japan, the United Kingdom (UK) and the Netherlands displayed the lowest regulatory barriers to services trade across sectors in 2022.

v.Economies with the highest trade liberalisation impact on the STRI in 2022 were Viet Nam, Japan, and Kazakhstan.

STRI 2022:

47 India
4Czech Republic

Restrictions over Different Sectors:

i.The 2022 STRI reflects restrictions that apply on key strategic services sectors such as rail freight transport, legal services and accounting.

  • These sectors are either reserved for public monopolies or they are completely closed for foreign direct investment and foreign services providers.
  • Limitations on foreign ownership also exist in other relevant sectors such as distribution, commercial banking and insurance.

ii.Least Restricted Sectors: Engineering services, computer services, road freight transport and sound recording are the sectors with the lowest score (least restricted) relative to the average STRI across all countries.

iii.Most Restricted Sectors: Accounting services, legal services, architecture services and rail freight transport are the sectors with the highest score (most-restrictive) relative to the average STRI across all countries.

Reforms in India:

  • India had been progressively introducing reforms contributing to a slight liberalisation of services trade in some sectors, between 2018 and 2021.
  • The report considers Privatisation of the government-owned airlines Air India and Air India Express in January 2022 as the key reforms undertaken by India in 2021-22.