Exports are a hot topic these days, but generally when people talk about exports, they are referring to product exports. Did you know, though, that the fastest growing type of exports is services?
More and more companies are finding profit in exporting services, and several trends ensure that these exports will grow rapidly.
Service exports are an important emerging trend in global trade. Many traditional manufactured product exports increasingly contain technology that requires installation, troubleshooting, maintenance, and repairs.
What counts as a service export?
The natural place to start is to clearly define what exactly a service export is, and is not.
If people think of anything when they hear the term “service export,” they might think of construction services on large foreign infrastructure projects. Or maybe oil rig workers, or film stars and production crews on foreign sets.
These are definitely some examples, but there’s a whole lot more where that came from.
A service export is, very simply, any service provided by a resident in one country to people or companies from another.
Ministry of Commerce and Industry, Government of India, with a view to giving proper direction, guidance and encouragement to the Services Sector, has set up an exclusive Export Promotion Council for Services in the name of Services Export Promotion Council
DISCLAIMER: The post is about to get extremely boring for casual readers though in order to include all possible information I am keeping the topic purely informative.
Here are the sectors as defined by SEPC promotes exports for:
1. Healthcare Services
Healthcare Services include hospital services and other health services like services by Nurses, Physiotherapist, and Paramedical Personnel.
The export of Healthcare Services can happen in the following four modes of services as under:
MODE 1 | Cross Border Services: Shipment of samples, diagnosis, clinical consultation via traditional mail channels, Electronic delivery of health services like Telemedicine, tele-surgery, tele-diagnostic services; medical back office services, medical transcription services and online medical education and consultation services.
Mode 2 | Consumption Abroad: Medical tourism for super specialty medical services and alternative systems of healthcare.
Mode 3 | Commercial Presence: Establishment of super specialty hospitals and clinics, diagnostic and treatment centre in collaboration between domestic and foreign health service providers, health insurance services and hospital management services.
Mode 4 | Movement of Natural Persons: Services of doctors, surgeons, nurses and midwives in foreign countries.
Sub Services of Healthcare:
Hospital Services
Services by Nurses, Physiotherapists and Paramedical Personel
Other Human Health Services
2. Legal Services
A broad definition of legal services would include advisory and representation services as well as all the activities relating to the administration of justice (judges, court clerks, public prosecutors, state advocates, etc.).
The export of Legal Services can happen in the following four modes of services as under:
MODE 1 | Cross Border Services: Cross border supply of legal services using Technological Services; For example– An Indian Law firm e-mails a memo to a client operating in USA.
Mode 2 | Consumption Abroad: Purchase of Legal Services in the territory of another country. For example – An Indian Legal firm represents an American client in an Indian Court.
Mode 3 | Commercial Presence: Expansion of a Legal Firm into another country. For example – An Indian Law firm establishes an office in USA.
Mode 4 | Movement of Natural Persons: Law Professionals enter into a foreign territory temporarily to provide services. For example – An Indian lawyer provides Legal services by visiting a client in USA to prepare a business acquisition.
3. Accounting & Auditing Services
Accounting is the preparation and analysis of financial information reported to internal and external users via financial statements.
Auditing may be defined as the evaluations of the reliability and credibility of financial information as well as “the systems and processes responsible for recording and summarizing that information”.
The export of such Services can happen in the following four modes of services as under:
MODE 1 | Cross Border Services: Cross border supply of accounting services using Technological Services. For example – An Indian Audit Firm sends Audited Accounts to a client operating in USA.
Mode 2 | Consumption Abroad: Usage of Accounting/Auditing Services in the territory of another country. For example– An American Client visits India and use Accounting/Auditing Services from an Indian Accounting/Auditing firm
Mode 3 | Commercial Presence: Expansion of a Local Accounting/Auditing Firm into a foreign country. For example – An Indian Accounting firm establishes an office in USA.
Mode 4 | Movement of Natural Persons: Accounting/Auditing Professionals enter into a foreign territory temporarily to provide services. For example – An Indian Chartered Accountant provides Accounting Services by visiting a client in USA to prepare a business acquisition.
Hotel & Tourism Related Services
Tourism and travel-related services include services provided by hotels and restaurants (including catering), travel agencies and tour operator services, tourist guide services and other related services.
One of the most crucial aspects of international tourism is the cross-border movement of consumers. This permits even unskilled workers in remote areas to become services exporters — for instance, by selling craft items, performing in cultural shows, or working in a tourism lodge.
The export of such Services can happen in the following four modes of services as under:
MODE 1 | Cross Border Services: Trade in Tourism Related Services like Travel agency and tour operator services using Technological Sources.
Mode 2 | Consumption Abroad: Tourists traveling from home Country to take a vacation in a foreign country.
Mode 3 | Commercial Presence: Building of Tourism related facilities in foreign countries.
Mode 4 | Movement of Natural Persons: Movement of both skilled and Semi skilled hotel and other tourism Industry workers on seasonal basis.
Environmental Services
Environmental services include sewage services, refuse disposal, sanitation and similar services, reducing vehicle emissions, noise abatement services, nature and landscape protection services and other environmental services.
The export of such Services can happen in the following four modes of services as under:
MODE 1 | Cross Border Services: Cross border supply of environmental services using Technological Services. For example – An Indian Environment Firm does remote monitoring and control of air pollution levels of some areas of USA.
Mode 2 | Consumption Abroad: Purchase of Environment Related Services in the territory of another country. For example – An American Client visits India and make use of Environmental Services of an Indian firm.
Mode 3 | Commercial Presence: Expansion of a Local Environmental Service provider into a foreign country. For example – An Indian company establishes a subsidiary in USA to provide solid waste treatment services to its clients in USA.
Mode 4 | Movement of Natural Persons: Environmental Professionals enter into a foreign territory temporarily to provide services. For e.g. – An Indian Environmental Technologist visits USA to provide natural disaster assessment services in USA.
Sub Services of Environmental Services:
Sewage Services
Refuse Disposal Services
Sanitation and Similar Services
Others
Entertainment Services
Audiovisual services including motion picture and video tape production and distribution services, motion picture projection services, radio and television services, radio and television transmission services, and sound recording.
The export of such Services can happen in the following four modes of services as under:
MODE 1 | Cross Border Services: Cross Border Supply Of Entertainment Services Using Technological Means.
Mode 2 | Consumption Abroad: Usage of Entertainment services in the territory of another Country .For Example –An American client visits India and uses the Entertainment related services from and Indian firm dealing in Entertainment services.
Mode 3 | Commercial Presence: Expansion of a local Entertainment firm into a Foreign country.For Example- An India Entertainment firm Establishes an office in USA.
Mode 4 | Movement of Natural Persons:Entertainment Professionals enter into a Foreign territory to provide Entertainment Services.
Sub Services of Environmental Services:
Entertainment Services (including theatre, Live bands, and Circus Services)
Motion Pictures and Video Tape Production and Distribution Service
Motion Picture Projection Service
Radio and Television Service
Radio and Television Transmission Services
Sound Recording
Maritime Transport Related Services
The Three Main areas covered in this Sector include: access to and use of port Facilities: Auxiliary Services; and Ocean Transport.
The export of such Services can happen in the following four modes of services as under:
MODE 1 | Cross Border Services: Cross Border Supply of Shipping Services using Technological Means.
Mode 2 | Consumption Abroad: Usage of Maritime Transport Services in the territory of another country. For Example –An American Client visits India and uses the Maritime Transport Related Services from an Indian Firm dealing in these Services.
Mode 3 | Commercial Presence: Expansion of a local Maritime Transport Firm into a foreign country. For Example- An India Shipping firm establishes an office in USA.
Mode 4 | Movement of Natural Persons:Maritime professionals enter into a foreign territory to provide Shipping services.
Sub Services of Environmental Services:
Passengers Transportation
Freight Transportation
Rental of Vessels with Crew
Maintenance and Repair of Vessels
Pushing and Towing Services
Supporting services for Maritime Transport
Distribution Services
Commission agents Services, Wholesale Trade services, Retailing services, Franchising are included in Distribution Services.
The export of such Services can happen in the following four modes of services as under:
MODE 1 | Cross Border Services: Cross Border Supply of Distribution services using Technological means.
Mode 2 | Consumption Abroad: Usage of Distribution Services in the territory of another country. For Example- An American Client visits India and Uses the Services from an Indian Firm dealing in Distribution Services.
Mode 3 | Commercial Presence: Expansion of a Distribution services Firm into a foreign country. For Example-An India Firm Establishes an office in USA
Mode 4 | Movement of Natural Persons: Distribution Professionals enter into a foreign territory to Provide their Services.
Sub Services of Environmental Services:
Commission Agents’ services
Wholesale Trade Services
Retailing Services
Franchising
Others
Architectural Services
Advisory and pre-design architectural services
Architectural design services
Contract administration services
Combined architectural design and contract administration services
Other architectural services: All other services requiring the expertise of architects, such as the preparation of promotional material and presentations , preparation of as-built drawings ,constant site representation during the construction phase ,provision of operating manuals, etc.
Educational Services
The sector includes primary, secondary, post-secondary and adult education services, as well as specialised training such as for sports. Educational Services include:
Primary Education Services
Secondary Education Services
Higher Education Services
Adult Education
Other Education Services.
Advertising Services
Sale or leasing services of:
Advertising space or time (services provided in soliciting advertising space or time for newspapers, other periodicals, and television stations);
Planning, creating and placement services of advertising (planning, creating and placement services of advertisements to be displayed through the advertising media)
Other advertising services (other advertising services not elsewhere classified, including outdoor and aerial advertising services and delivery services of sample and other advertising material.
Examples would be:
An Advertising firm Prepares an Advertisement for a USA based Client and communicates the same via email.
An American Client visits India and uses the services of an Advertising firm.
An Indian Advertising firm establishes an office in USA.
An Indian Advertising Professional Provides his Services by Visiting a client in USA.
Consultancy Services
It would not be fare to state the obvious, though any opinion or expertise that is paid for, is consultancy.
Examples are:
An Indian Consultant prepares an organization analysis for a USA based client and communicates the same via email.
An American client visits India and uses the services of consultancy firm.
An Indian consultancy firm establishes an office in USA.
An Indian Consultant Provides his services by visiting a client in USA.
Marketing Services
Cross border supply of marketing Research services using technological means. For Example: A Marketing Research Firm prepares a market analysis report for a USA based client and communicates the same via email.
Usage of Marketing Research services in the territory of another country. For Example: An American client visit India and uses the service of Marketing Research firm.
Expansion of a Marketing Research firm into foreign country . For Example: An Indian marketing Research firm establishes an office in USA.
Marketing Research Professionals enter into a foreign territory to provide their services. For Example: An Indian professional Provides his services by visiting a client in USA.
Printing & Publishing Services
Cross border supply of Printing and Publishing services using technological means.
Usage of Printing and Publishing services in the territory of another country. For Example: An American client visit India and uses the service of an Indian Publisher to print his book.
Expansion of a Printing and Publishing firm into foreign country. For Example: An Indian Printing firm establishes an office in USA.
Printing and Publishing Professionals enter into a foreign territory to provide their services. For Example: An Indian professional Provides his services by visiting a client in USA.