India's Export of Services during Pre and Post Reform Periods

One of the key consequences of the advance in science and technology has been the growth in trade across borders. The progress made in the field of transportation, communication and the recent ascent of the internet has opened a Pandora's Box for firms seeking to expand their businesses. The easing of the regulatory framework in conjunction with liberal policies adopted by countries across the globe has made the world a local market place. International trade in goods as well as services has largely benefited from this trend. However, trade in "goods" is different from trade in "services". The difference lies in the inherent nature of the two. Services are characterized by intangibility, invisibility, transience and non-storability, thus making them different from "goods". Of course, all these characteristics mentioned above may not apply simultaneously to a service. Moreover, "service" is a process, while "good" is an object. Hence, they can neither be easily defined, nor measured. For example, tariffs and quotas are a reflection of the barriers in merchandise trade. However, impediments to trade in services are much more difficult to define and quantify. The quality of a "service" cannot be identified before it is purchased, thus these are referred to as "experience goods". So also, for a service to be rendered, often, the supplier and the consumer need to be in close proximity. These differences between the two make trade in services different from that in goods.