Introduction
Invisible export is the part of international trade that does not involve
the transfer of goods or tangible objects, which mostly include service sectors
like banking, advertising, copyrights, insurance, consultancy etc. invisible
exort also known as invisible trade is basically associated with the person’s
own skill and knowledge is what is 'sold' rather than a piece of software or
books.
Invisible trade is composed of invisible imports and invisible exports. Since
nothing tangible is transferred, the importer is defined as the person, group or
country that receives the service. The exporter is defined as the supplier of
the service. The net total of a country's invisible imports and invisible
exports is called the invisible balance of trade and is a part of the country's
balance of trade. For countries that rely on service exports or on tourism, the
invisible balance is particularly important.
Export Performance of the Indian service Industry
An analysis of the consultancy contracts secured by Indian project in the
foreign market has been carried out by Exim Bank of India. As per the analysis,
done during 1995-96 to 2000-01 indicates that consultancy contracts were secured
largely in West Asia which accounted for 39% number wise and 46% value wise
followed by South East Asia and Pacific & South Asia.
South East Asia constituted 22% both by number and by value whereas South
Asia was 18% number wise and 16% value wise. According to the 2002 data of the
Federation of Indian Export Organizations (FIEO), India's share in global trade
in services was about 1.3%. India’s share of consultancy exports is about 0.5%
of global trade in services.
Government Initiatives
In the recent years the Government of India has take some important step for the
improvement of service based export. The Foreign Trade Policy, 2004 – 09 is one
of them, which has announced the setting up of Services Export Promotion Council
for promoting the Indian service sector in the foreign market. Government of
India has also introduced Market Development Assistance (MDA), Market Access
Initiative (MAI) scheme, proactive EXIM Policy and EXIM Bank schemes. Government
also provides exemption on service tax for export of consultancy services.
However due to lack of clarity in the provisions in the present notification,
consultancy export may be affected.
Strengths and Weaknesses of Indian Consulting Industry
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The major strengths of Indian invisible export or invisible trade
include professional competence, low cost structure, diverse capabilities,
high adaptability and quick learning capability of Indian consultants.
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The major weaknesses of Indian invisible trade or invisible export
include low quality assurance, low local presence overseas, low equity base,
lack of market intelligence and low level of R&D.
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