Free Trade - Why India Has Been Getting Better at Trade With the Global Community
The services sector in the global economy remains in flux. In spite of this, there are numerous service sectors that have actually flourished during the global economy's recovery. If you are in the business of providing services or are thinking about entering the sector, now is a great time to get into the game.
Services in sectors that experience strong growth can be categorized in two main ways - between service-related products and between service providers and consumers. In short, the world is not service-oriented, rather, consumers have choices among many service providers in a variety of countries. The second mode is more the exception than the rule, since there are many countries that are not open to service trade at all. Here, the focus is on the types of products and services that are traded instead of the countries in which they are traded.
One of the major service trade categories is that between consumers and suppliers from other countries. Consumers from Canada, the United States, and many European Union member countries can purchase automobiles from Mexico with very little difficulty. These consumers can purchase vehicles at retail prices and pay for them over the border in a matter of hours. If they choose to take their vehicles across the border, they can still do so, albeit with a much longer wait than if they purchased their vehicles domestically. In this case, access to a cross- Border market opens up new opportunities for the service providers who can now offer lower prices to these buyers.
Another example of this phenomenon is the services sector in the Global Business Network. The BN global business network connects manufacturers, importers, exporters, distributors, liquidators, exporters, middlemen, investors, technical staff, and agents. The BN network is a powerful tool for the services sector because it links the various economic systems of nearly all the countries that are members of the BN. finance provides an unparalleled opportunity for the global business network to expand its member companies to other parts of the world by offering the products and services to these markets at lower costs.
The services trade is a major mode of distribution and employment across the world. Service trade makes up approximately 17% of the world's total gross domestic product. As services trade is growing in both absolute and relative terms, some areas of the global economy are seeing negative growth in services trade. For example, in some parts of Latin America, there has been a decline in services trade as a result of political and security risks, and poor infrastructure. finance in these Latin American countries make it difficult for exporters to ship automobiles, machineries, appliances, and services across the borders.
In this situation, cross-border trade becomes a critical mode of distribution. Cars are distributed between two countries in a matter of hours due to the lack of transportation infrastructure. In some cases, the distribution is direct, but in other cases, the companies prefer to hire drivers and deliver their products either across the border or via trucks that are driven from one country to another. Because of the huge importance of transport, the global economy suffers a great loss in the process of distribution. finance is called 'structural deficit'.
In the context of the free trade debate, the need to liberalize the sector and make it available to all possible consumers in the world has become more important now than ever before. India is an important example of how a small developing country can grow and become a high-income producer thanks to its liberalization policies. It is doing this because the government has granted greater market access to the small Indian exporters of every commodity. One important example is the financial services sector. finance has been an area where free trade has not only improved competition but also helped Indian companies to grow substantially.
If India were to open up its market access to the rest of the world, many companies in India would find it difficult to sustain their business because they would have to share their markets with other companies. A key example of this is the case of Air Deccan, a leading Indian airline company. Air Deccan's parent airline, Kingfisher, was a major player in the domestic market until recently, but thanks to free trade, it was able to expand its operations beyond India's borders. Now, it has signed deals with several foreign airlines to travel to a number of foreign destinations.