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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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United States International Trade Commission (USITC)

Office of Industries Working Paper No. ID-26

 

An Overview and Examination of the Indian Services Sector

No. ID-26

by Lisa Alejandro, Eric Forden, Allison Gosney, Erland Herfindahl, Dennis Luther, Erick Oh, Joann Peterson, Matthew Reisman, and Isaac Wohl, Office of Industries;

August 2010

http://usitc.gov/publications/332/working_papers/ID-26.pdf

[full-text, 97 pages]

 

ABSTRACT:

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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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
Cornell/ILR School                        
16 E. 34th Street, 4th Floor             
New York, NY 10016                        
                                   
Telephone: (607) 255-2703                
Fax: (607) 255-9641                       
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