example, we consider professionals from India who wish to practice in the United States. We recognize that the regulatory requirements in most other countries are similar if not more burdensome, and that many of the requirements imposed on foreign professionals by a particular US state are also imposed on professionals from other US states. Furthermore, current trade and immigration policies imply that what may initially be “trade in services” through the temporary presence of professionals often ends up as permanent migration. Hence, it is difficult to distinguish between the two forms of foreign presence when we describe regulatory regimes or present data on foreign presence.

The issue of international movement of professionals, while important from a policy perspective, has not provoked much empirical research.<sup>2</sup> Thus there is not a well-established methodology and little information and data to fall back upon. Much of the work in this paper is based on primary data. However, both the data and the estimates must at this stage be seen as a work in progress.

The structure of the paper is as follows. Section II provides a brief overview of the extent of foreign and Indian professional presence in the US as well as an indication of educational capacity in India. Section III summarizes the regulatory requirements that Indian professionals face in the US market, with a detailed description provided in Annex I. Section IV discusses the implications of regulatory discrimination and the economic cost of regulations. Section V examines how regulatory impediments to the export of professional services can be addressed through bilateral and multilateral avenues. Section VI discusses the priorities for international negotiations and domestic reform.

# **II. INDIAN PROFESSIONALS IN THE UNITED STATES AND INDIAN EDUCATIONAL CAPACITY**

A discussion on “trade” in services would ideally focus on foreign professionals working temporarily in the United States – reflecting the fact that multilateral and regional trade agreements treat traderelated labor mobility as distinct from immigration. There is, unfortunately, no data on the number of foreign professionals in the United States on temporary stay visas, but from the US census data it is possible to calculate the number of “foreign born” professionals.<sup>3</sup> We use this latter data to illustrate the significant presence of foreign professionals.

Foreign professionals in the five services considered here, namely, accountants and auditors, architects, engineers, physicians and surgeons, and lawyers, made up 17 percent of the total professionals of the US economy—which is smaller than the share of foreign goods and foreign capital in the US economy, but higher than the share of foreign professionals in most other countries. In absolute numbers, these five professions accounted for nearly 5.1 million jobs in 2000, of which, nearly 4.24 million were held by US-born professionals and the remaining 0.86 million by foreignborn professionals (many of whom have subsequently become US citizens).

The share of foreign professionals varies considerably across different professions, with professions that are less regulated and more intensive in science and technology-subjects tending to have a larger foreign presence (Figure 1a). Foreign presence is the highest in the field of computer software and medicine, with foreign computer software engineers and physicians and surgeons accounting for 29 and 27 percent of the total workforce in their respective fields. At the other extreme is the legal profession, where foreign-born lawyers account for only 6 percent of the total workforce.

> 2 One exception is the excellent working paper by Ganguly (2005) which covers ground similar to that in Section III of this paper.

> 3 Data is available on the number of individuals entering the United States on specialty occupation (H1B) visas, but this data records the number of entries so that an individual may be counted more than once depending on the number of times he or she leaves and returns to the United States.

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