Chapter 16

Trade In Services

International Marketing
Chapter-16 Trade In Services

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

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

Characteristics And Categories

Of Services

An important characteristic of services that

has far reaching implications for marketing
of services is their inseparability.
Services cannot be separated from their
providers, whether they are persons or
machines.
This does not mean that all services
require the physical proximity of the
provider and user.International Marketing
Chapter-16 Trade In Services

1.

2.

There are two broad categories of

services viz.
Those that necessarily require the
physical proximity of the provider and
the user
Those that do not, though such physical
proximity may be useful.
International Marketing
Chapter-16 Trade In Services

Restrictions

International trade in services involves

intricate issues like right to establish and
factor mobility.
These are the problems faced in liberalizing
trade in services as compared to trade in
goods.
Due to the special characteristics and the
socio-economic and political implications of
certain services, they are, generally, subject
to various types ofInternational
national
restrictions.
Marketing
Chapter-16 Trade In Services

Services In India

India has great potential in a variety of

services.
The
large
number
of
scientists,
professionals and skilled and semi-skilled
personnel working abroad is indicative of
Indias potential in several fields.
With proper planning and development,
India can make great strides in services
trade.
International Marketing
Chapter-16 Trade In Services

Summary

An increase in share of services in the GDP and

total employment leads to economics development.
The growing importance of services is reflected in
the international trade also.
The services in international trade is subject to a
lot of restrictions.
Protective measures include visa requirement,
investment regulations, restriction on repatriation,
marketing
regulation,
restrictions
on
the
employment of foreigners, compulsion to use local
facilities etc.
International Marketing
Chapter-16 Trade In Services