China's trade restrictions for services exporters under review

India is compiling a list of trade barriers its services exporters encounter in China, such as licensing, registration, and local regulations. The trade ministry has requested information from industry stakeholders regarding China's data localization, cybersecurity, and cross-border data transfer mandates, as well as visa, work permit, and professional qualification recognition requirements.

Officials aim to pinpoint trade impediments in both goods and services to uncover potential opportunities, including partnerships, investments, and export growth. In 2024, India's services exports to China amounted to $8.95 billion. Despite China importing services worth approximately $300 billion, India's exports to that nation are only around $8 billion, according to an industry representative. Information technology, IT-enabled services, and digital solutions comprise India's primary exports to China.

Challenges such as tax, payments, and remittance issues, as well as difficulties accessing contracts, are some of the other concerns raised by China's service exporters. While the US and the UK lead in commercial services exports, India's share has risen to 4.3% in 2024 from 3% in 2014, whereas China's has grown to 5.1% from 4.2% during the same period.

India's services export growth averaged 14% between 2022-23 and 2024-25, compared to 7.6% before the Covid-19 pandemic, highlighting robust global demand and expanding prospects in digital and space services.

Indian service firms engage in China but typically don't export directly to their clients; instead, they perform tasks for other entities representing the client. The department has also sought information on cross-border and virtual service delivery, commercial presence requirements, establishment, ownership, local partnerships, and operational specifications.

Trade experts note that visa and professional movement are political issues, but they suggest that challenges related to mutual recognition agreements, certification, and standards are more manageable. They also emphasize the compatibility of India's Digital Personal Data Protection Act and China's Personal Information Protection Law, which govern personal data in both countries.