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Chapter 16

Trade In Services

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Objectives

Why there is growing importance ofservices

What are the characteristics andcategories of services

What are national restrictions

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Introduction International trade in services, which

make up a major share of the invisiblesaccount of the Balance of Payments, hasbeen growing fast.

The services sector which contributesmore than 60 per cent of the world GDP isgrowing fast.

The contribution of service to GDP andemployment is substantially high in,

particularly, the developed economies.International Marketing

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Characteristics And Categories

Of ServicesAn important characteristic of services that

has far reaching implications for marketingof services is their inseparability.

Services cannot be separated from theirproviders, whether they are persons or

machines. This does not mean that all services

require the physical proximity of theprovider and user.International Marketing

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There are two broad categories ofservices viz.

1.

Those that necessarily require thephysical proximity of the provider andthe user

2. Those that do not, though such physicalproximity may be useful.

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Restrictions

International 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.

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Services In India India has great potential in a variety of

services.

The large number of scientists,

professionals and skilled and semi-skilledpersonnel working abroad is indicative ofIndias potential in several fields.

With proper planning and development,India can make great strides in services

trade. International MarketingChapter-16 Trade In Services

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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 alot of restrictions.

Protective measures include visa requirement,

investment regulations, restriction on repatriation,marketing regulation, restrictions on theemployment of foreigners, compulsion to use local

facilities etc.International Marketing

Chapter-16 Trade In Services