What is invisible trade? Discuss salient aspects of India's trade in services.
Trade in services is called invisible trade. Since services are invisible, export and import of services has been named as invisible trade. In absolute terms, there has been significant increase in India's foreign trade in services. Export and import of foreign travel, transportation and insurance has largely increased during last four decades. There has been a change in composition of services exports. Software and other miscellaneous services have emerged as the main categories of India's export of services. Share of travel and transportation has declined to 29.6% in 2003-04 from 64.3% in 1995-96 while the share of software exports has increased from 10.2% in 1995-96 to 49% in 2003-04.
The composition of India's external trade has been changing. During 1950s and 60s exports were mainly of primary goods. Over time, the role of engineering goods has been increasing. Overall manufactured goods constitute 66 % of total exports, of which engineering goods are 27%. Textiles and textile products, garments and leather products make around 10 % of India's exports.
In nutshell, we can say that the role of the external or internationally traded goods sector has been growing steadily in Indian economy. At present imports and exports together account for upto 49 % of India's GDP which was 18% in 1990s. In India there is greater share of exports of services which are IT software services, called IT- enabled services (ITES). It contributed more than 20% of India's export earnings. India accounts for about 45% of the world's BPO services. The major Indian IT companies, TCS, Infosys and Wipro, initiated and perfected the Global Services Delivery (GSD) model. It is because India has a vast pool of software engineers and an even bigger pool of English-knowing staff. With growing competition in the market for such services, Indian companies have moved from BPO to Knowledge Process Outsourcing (KPO), which involves providing services for R and D and to high-end consulting.
Reebok orders for footballs to local manufacturers of Ludhiana and then sells it all over the world. It is an example of what?
State the important changes being observed in composition of India's external trade since 2007-08.
When a middleman is involved in handling export procedure, then it is called by what name?
"International trade benefits both the parties involve."Do you agree? Justify your answer:
Discuss the major trends in India's foreign trade. Also list the major products that India trades with other countries.
In what ways is exporting a better way of entering into international markets than setting up wholly owned subsidiaries abroad.
"Wholly owned subsidiary is a more investing, more risky and less return giving venture."Do you agree? Substantiate your answer.
Discuss briefly the factors that govern the choice of mode of entry into international business.
Differentiate between contract manufacturing and setting up wholly owned production subsidiary abroad.