Abstract:
The Indian economy has surged on the back of its exports in services, particularly
information technology services. As the nature of trade in services has diversified over
the decades, India now trades internationally not only in transport, communication,
finance, and business services, but also in services like health and education. While the
former set of services have immediate forward and backward linkages to other sectors of
the economy, sectors like health and education have a more implicit and long-term
impact on the economy. It thus becomes crucial to assess what the prospects of an
increasing trade in basic services like healthcare hold. This study is an attempt at
describing India’s participation in international trade in healthcare services, testing
assumptions based on drivers of this trade, and reflecting upon the policy conundrums
that India stands to face as this trade expands. The study uses the Modes of Supply
classification given by the General Agreement on Trade in Services to conduct the
analyses.
It finds that trade in healthcare services has a tendency towards regional
polarization. In addition, relative cost advantage in terms of factors of production was
also indicated. The study emphasises on the need for a policy framework that keeps pace
with the rapidly evolving nature of health services traded internationally.
