Trade in Services


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A nation is said to be economically developed when there is an increase in the share of services in GDP and total employment. Even in the international trade there is a growing importance on services. Services in international trade are subjected to a lot of restrictions such as investment regulations, restriction on repatriation, restrictions on the employment of foreigners, compulsion to use local facilities etc.

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Trade in Services

  1. 1. Chapter 16Trade In Services International Marketing Chapter-16 Trade In Services
  2. 2. Objectives Why there is growing importance of services What are the characteristics and categories of services’ What are national restrictions International Marketing Chapter-16 Trade In Services
  3. 3. Introduction International trade in services, which make up a major share of the invisibles account of the Balance of Payments, has been growing fast. The services sector which contributes more than 60 per cent of the world GDP is growing fast. The contribution of service to GDP and employment is substantially high in, particularly, the developed economies. International Marketing Chapter-16 Trade In Services
  4. 4. Characteristics And Categories Of ServicesAn important characteristic of services thathas far reaching implications for marketingof services is their inseparability.Services cannot be separated from theirproviders, whether they are persons ormachines.This does not mean that all servicesrequire the physical proximity of theprovider and user.nternational Marketing I Chapter-16 Trade In Services
  5. 5. There are two broad categories of services viz.1. Those that necessarily require the physical proximity of the provider and the user2. Those that do not, though such physical proximity may be useful. International Marketing Chapter-16 Trade In Services
  6. 6. RestrictionsInternational trade in services involvesintricate issues like right to establish andfactor mobility.These are the problems faced in liberalizingtrade in services as compared to trade ingoods.Due to the special characteristics and thesocio-economic and political implications ofcertain services, they are, generally, subjectto various types of national restrictions. International Marketing Chapter-16 Trade In Services
  7. 7. Services In IndiaIndia has great potential in a variety ofservices.The large number of scientists,professionals and skilled and semi-skilledpersonnel working abroad is indicative ofIndia’s potential in several fields.With proper planning and development,India can make great strides in servicestrade. International Marketing Chapter-16 Trade In Services
  8. 8. SummaryAn increase in share of services in the GDP andtotal employment leads to economics development.The growing importance of services is reflected inthe international trade also.The services in international trade is subject to alot of restrictions.Protective measures include visa requirement,investment regulations, restriction on repatriation,marketing regulation, restrictions on theemployment of foreigners, compulsion to use localfacilities etc. International Marketing Chapter-16 Trade In Services