Thursday, August 19, 2010
[IWS] USITC: INDIAN SERVICES SECTOR : AN OVERVIEW & EXAMINATION [August 2010]
IWS Documented News Service
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
United States International Trade Commission (USITC)
Office of Industries Working Paper No. ID-26
An Overview and Examination of the Indian Services Sector
by Lisa Alejandro, Eric Forden, Allison Gosney, Erland Herfindahl, Dennis Luther, Erick Oh, Joann Peterson, Matthew Reisman, and Isaac Wohl, Office of Industries;
[full-text, 97 pages]
India’s service sector has grown rapidly since the 1990s. Domestic demand for services
has increased as incomes have risen, triggering the expansion of industries such as banking, education,
and telecommunications. Exports have also increased rapidly, led by information technology and
business process outsourcing (IT-BPO). India’s ability to offer low-cost, high-quality IT-BPO services
has made it a world leader in this industry. However, employment in services has not grown as quickly
as output. The majority of India’s jobseekers are low-skilled, but demand for workers is growing
fastest in higher-skill industries. The supply of highly-skilled workers has not kept pace with demand,
causing wages to increase faster for these workers than for lower-skilled ones.
India’s government has supported the growth of service industries through a mix of
deregulation, liberalization, and incentive programs, such as the Software Technology Parks of India.
Nevertheless, burdensome regulations, poor infrastructure, and foreign investment restrictions
continue to affect service firms’ ability to do business. USITC analysis suggests that additional
liberalization would lead to an increase in India’s imports of services.
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