China's trade restrictions for services exporters under review

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The commerce department has sought details from the industry on China's data localisation, cybersecurity and cross-border data transfer requirements, as well as visas, work permits and the recognition of professional qualifications.

"Efforts are underway to identify trade barriers in China in both goods and services," said an official, who did not wish to be identified. The exercise is important for Indian service providers to explore emerging opportunities, including potential partnerships, investments and areas for increased exports. India's services exports to China in 2024 totalled $8.95 billion.

Issues related to tax, payments and remittances affecting services exports, as well as challenges in accessing contracts, are some of the other concerns raised by services exporters to China.

While the US and the UK are the world's top exporters of commercial services, India's share rose to 4.3% in 2024 from 3% in 2014, while China's grew to 5.1% from 4.2% during this period. The average growth of India's services exports increased to 14% between 2022-23 and 2024-25 from 7.6% before the Covid-19 pandemic, reflecting strong global demand and expanding opportunities in sectors such as digital and space services.

According to industry representatives, Indian services firms are active in China, but most of them don't export directly to their clients; instead, they do jobs for other entities representing the client.

The department has also asked for information on the cross-border and virtual delivery of services, as well as the commercial presence of these firms in China - including establishment, ownership, local partnerships and operational requirements.

Trade experts said that the visa and physical movement of professionals is a political issue, but challenges related to mutual recognition agreements, certification and standards are easier to solve.

"One also needs to see how compatible India's Digital Personal Data Protection Act and China's Personal Information Protection Law are, which regulate personal data in the two countries," said a Delhi-based trade expert.