Invisible Export, What is it?

Posted in: Business in gosol's Blog

Introduction
Invisible export is the part of international trade that does not involve the transfer of goods or
tangible objects, which mostly include service sectors like banking, advertising, copyrights,
insurance, consultancy etc. invisible exort also known as invisible trade is basically associated
with the person’s own skill and knowledge is what is 'sold' rather than a piece of software or
books.

Invisible trade is composed of invisible imports and invisible exports. Since nothing tangible is
transferred, the importer is defined as the person, group or country that receives the service.
The exporter is defined as the supplier of the service. The net total of a country's invisible
imports and invisible exports is called the invisible balance of trade and is a part of the country's
balance of trade. For countries that rely on service exports or on tourism, the invisible balance is
particularly important.

Export Performance of the Indian service Industry

An analysis of the consultancy contracts secured by Indian project in the foreign market has
been carried out by Exim Bank of India. As per the analysis, done during 1995-96 to 2000-01
indicates that consultancy contracts were secured largely in West Asia which accounted for
39% number wise and 46% value wise followed by South East Asia and Pacific & South Asia.

South East Asia constituted 22% both by number and by value whereas South Asia was 18%
number wise and 16% value wise. According to the 2002 data of the Federation of Indian Export
Organizations (FIEO), India's share in global trade in services was about 1.3%. India’s share of
consultancy exports is about 0.5% of global trade in services.

Government Initiatives
In the recent years the Government of India has take some important step for the improvement
of service based export. The Foreign Trade Policy, 2004 – 09 is one of them, which has
announced the setting up of Services Export Promotion Council for promoting the Indian service
sector in the foreign market. Government of India has also introduced Market Development
Assistance (MDA), Market Access Initiative (MAI) scheme, proactive EXIM Policy and EXIM
Bank schemes. Government also provides exemption on service tax for export of consultancy
services. However due to lack of clarity in the provisions in the present notification, consultancy
export may be affected.

Strengths and Weaknesses of Indian Consulting Industry

• The major strengths of Indian invisible export or invisible trade include professional
competence, low cost structure, diverse capabilities, high adaptability and quick learning
capability of Indian consultants.
• The major weaknesses of Indian invisible trade or invisible export include low quality
assurance, low local presence overseas, low equity base, lack of market intelligence and
low level of R&D.

An ever increasing number of foreign tourists are coming to this country in search of the "real
America." That's good news for the states. Although international visitors may be drawn the first
time by Disneyland and Sea World, big-spending Japanese and European visitors are just as
eager to return to visit a Montana dude ranch or hike to the bottom of the Grand Canyon Grand
Canyon, great gorge of the Colorado River, one of the natural wonders of the world; c.1 mi (1.6
km) deep, from 4 to 18 mi (6.4–29 km) wide, and 217 mi (349 km) long, NW Ariz. .

Attracting foreign tourists has become big business. International tourism is an important source
of income, foreign exchange and employment. Last year, foreign visitors spent $20 billion more
in this country than American tourists spent abroad. In fact, tourism is one of the few industries
with a trade surplus. Although tourism is often called the invisible export and its benefits
overlooked, the fact is, it generates more export revenue than automobiles and computers. It
surpasses agricultural exports by two to one.

Tourism is the world's largest and fastest growing industry, contributing $3.5 trillion or more than
6 percent of the world's gross national product. The World Travel and Tourism Council About
The World Travel and Tourism Council (WTTC) is a global forum comprising the presidents,
chairpersons and CEOs of companies involved in the travel and tourism industry. reports that
tourism employs 127 million workers. That's one in 15 jobs or about 7 percent of the world's
labor force.