ABSTRACT
This chapter examines the importance of the service sector for the economic development of India. It discusses the economic significance of the service sector in India. The chapter considers the Indian position as an offshoring location. It also analyses India's services exports, its composition and the comparative advantage of various sectors of services. The looks into the difficulties of building an international consensus on the need for liberalisation of trade in services and India's role in this process. The increasing importance of services to the Indian economy is related to the development of offshoring, a characteristic feature of globalisation processes, whereby the provision of services is transferred abroad. During the 1980s, two US corporations, Texas Instruments and Hewlett Packard, established export-oriented subsidiaries in India. The success of these investments demonstrated that India, with its well-educated workforce, qualified engineering personnel and highly skilled specialists in the professional service sector, may achieve comparative advantage in the production of software.
