WT/REG329/2  
 
9 September 2013  
(13-4702)  Page: 1/3  
Committee on Regional Trade Agreements  Original: English  
 
FREE TRADE AGREEMENT BETWEEN INDIA AND MALAYSIA 
(SERVICES) 
QUESTIONS AND REPLIES 
 The following communication, dated 4 September 2013, is being circulated at the request of 
the delegations of India and Malaysia.  
 This document reproduces the questions addressed to the Parties and the responses 
submitted. 
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SERVICES 
 
 
Questions from the Delegation of Australia 
 
General comments (based on a comparison  between the India-Japan FTA and the 
India-Malaysia FTA) 
 
1.1.  Australia notes that India and Japan pr ovided improved GATS plus commitments on 
financial services under the India-Japan FTA. In contrast the India-Malaysia FTA did not 
contain improved financial services commitments.  
 Are there specific reasons for this differe nce in the level of ambition on financial 
services? Did India seek to cover financial services in its FTA with Malaysia?  
 
Both India and Malaysia mutually agreed not to include any additional commitments on 
financial services. 
 
1.2.  Australia also notes the India-Japan FTA contained additional textual provisions on 
financial services, while the India-Malaysia FTA did not.  
1.3.  Does India consider the textual elements on financial services in its FTA with Japan 
represent a GATS plus outcome?  
1.4.  In what ways do they depart from GA TS coverage? Does India seek to use FTAs to 
complement its domestic reform proc esses on financial sector reform? 
Each FTA has to be seen as a standalone agreement. It is not necessary that two FTAs 
w o u l d  h a v e  t h e  s a m e  t e x t .  I n  t h i s  F T A ,  I n d i a  a n d  M a l a y s i a  m u t u a l l y  a g r e e d  t o  h a v e  t e x t  a n d  commitments as are mentioned in the FTA. 
 
Provisions on Trade in Services and Investment 
General provisions on trade in services : 4.3.4 Other measures on investment 
 
1.5.  Australia notes that, at the time of the signing of the Agreement, Annexes 10.2 and 
10.3 (Schedules of Reservations) were not completed (para 4.27). The preparation of 
the Annexes is a work-in-progress and is covered by Article 10.17 (Work Programme) of 
the Agreement. WT/REG329/2 
 
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   Could the Parties provide an update on  the work programme for Annexes 10.2 and 
10.3?    The work programme is under finalization. 
 
Regulatory provisions: 4.5.1 Domestic regulation 
 
1.6.  Australia is interested in the approa ch India and Malaysia took towards domestic 
regulation provisions in the Agreement. 
 Could the Parties explain their approach to domestic regulation outlining, in 
particular, how they chose to incorpor ate GATS and any GATS-plus commitments? 
 
As explained by the WTO Secretariat in their factual presentation, the approach followed 
under Article 8.9 is to reiterate and elaborate some of the principles of GATS Article VI. This is 
reflected in sub-clauses (b) and (c) of Article 8.9.4. 
 Question from the Delegation of Canada 
 1.7.  Paragraph 4.4 Liberalization commitm ents, India-Malaysia - WT/COMTD/RTA/5/1 
WT/REG329/1: 4.36. Article 8.7.1 permits th e Parties to modify or withdraw any 
commitment in its Schedule of Specific Co mmitments under Annex 8-1, at any time 
starting from 3 years after the date of entry into force of such a commitment. Pursuant 
to Article 8.8, the Parties shall review commitments on trade in services with the first review taking place within 5 years of the en try into force of the Agreement. The review 
shall ensure due respect for the national poli cy objectives and the level of development 
of the Parties, both overall and in individual sectors.  
 Pursuant to Article 8.8, the Parties sha ll review commitments on trade in services 
with the first review taking place within  5 years of the entry into force of the 
Agreement. While the Agreement has only been in force for just over 2 years, can the Parties explain whether such a review has take n place? If not, are there any plans in the 
near future for such a review? 
 
No review has taken place yet. The review of the Agreement will take place as per the 
obligations and timelines set in the Agreement. 
 
Questions from the Delegation of the European Union 
 
Provisions on Trade in Services and investment 
Scope and definitions 
 
1.8.  With reference to Chapter 8 on Services: 
a. Could the Parties explain why, unlike in  the GATS, they have not undertaken 
any commitments in the sector of financial services?  
Both India and Malaysia mutually agreed not to include any additional commitments on 
financial services. 
 
b. As regards maritime services, could Indi a please explain how the headnote has 
to be read together with the commitme nts, and whether it means that India 
can unilaterally change its commitments  based on the headnote and without 
withdrawal procedure? 
Article 8.7 of the Chapter on Trade in Services  will apply to the Modification of Schedules. 
The Head-note clarifies the relevant authorities that have the ability to enact domestic regulations. 
 
  WT/REG329/2 
 
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  c. As regards auxiliary maritime services , could India explain the meaning of 
"principal place of business" mentioned in  the headnote and further explain, if 
this means that international maritime  companies having their headquarters 
elsewhere cannot provide any auxiliary services in India?  
International maritime companies having their headquarters elsewhere are providing 
auxiliary maritime services through their subsidia ry company registered in India, and acting in 
accordance with the domestic regulatory framework. 
 
National treatment and MFN 
1.9.  Each Party reserves the right to make future reservations on measures that do not conform to Article 10.4 (National Treatment) on new and emerging sectors, sub-sectors, 
industries, products, or activities. 
 Could the Parties explain how do they in terpret the above-mentioned provision?  
 
 It is to be decided as per mutual Agreement. 
 1.10.  What criteria would be used  to determine whether a specific 
sector/industry/activity fell within this provision?  
It is to be decided as per mutual agreement. 
 
1.11.  How would newly privatised indust ries be regarded in this respect? 
It is to be decided as per mutual Agreement. 
 General Provisions of the Agreement 
Institutional framework 
 1.12.  According to paragraph 5.11, Chap ter 11 (Articles 11.1-11.6) establishes a 
framework for Economic Cooperation as a mean s to expand and enhance the benefits of 
the Agreement and to promote capacity building activities in areas of mutual interest.  
a. Could the Parties indicate which actions have been taken to present for 
enhancing the economic co-operation as  referred to in this Chapter?  
b. Which are the results obtained to present? 
The provision for a framework is to enable bo th Parties to enhance capacity building and 
collaboration in other economic sectors bilaterally . However, as of now, no actions have been 
taken in this regard. 
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