Global services trade: What makes India different…

‘Mode 3’, or ‘establishment of commercial presence abroad’ is the main mode of supply of services globally, accounting for almost 60% of the total services trade, according to a new WTO data set.

However, India’s services exports are mainly via Mode 1 — services provided by phone, fax, or electronic means— also called cross-border supply.

Here’s a look at some of the findings of this WTO study that for the first time estimates trade in services by mode of supply for a large number of economies...

What are the four modes of supply...

Mode 1 Cross-border supply: Neither the consumer nor the producer/supplier moves, only the service crosses the border. Examples cover services provided by phone, fax, or electronic means (medical diagnosis, legal advice & fi nancial services).

Mode 2 Consumption abroad: Services supplied in the territory of one country to the service consumer of any other country. For example, persons who travel to another country to consume services locally (tourists, medical visits, education.

Mode 3 Commercial presence: When supplier company/country establishes an affi liate in a foreign country (receiver of services) to serve the market locally. For instance, a foreign bank setting up operations in another country.

Mode 4 Presence of natural persons: Services supplied by individuals of a country through temporary presence in the territory of another country. Ex: A computer services company sending its employee to a customer of another country.