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Q6 (IAS/2011) Economy › External Sector & Trade › India trade structure Answer Verified

In terms of economy, the visit b foreign nationals to witness the XIX Common Wealth Games in India amounted to

Result
Your answer: —  Â·  Correct: A
Explanation

In economic terms, the visit by foreign nationals to witness the XIX Commonwealth Games in India is classified as an export of services. Tourism is a significant foreign exchange earner for India, categorized under the tertiary sector [2]. When foreign tourists consume domestic services such as accommodation, transportation, and food, it results in an inflow of foreign currency, which is recorded as a credit item in the Balance of Payments [2]. This spending represents the sale of domestic services to non-residents, fitting the definition of an export . International tourism receipts are a vital component of India's trade structure, with the country ranking 12th globally in tourism receipts in 2019 [1]. The World Trade Organization and national accounting standards treat such inbound tourism consumption as an export of services because the production occurs within the domestic territory while the payment comes from abroad .

Sources

  1. [2] Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 11: Industries > TOURISM > p. 90
  2. [1] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 14: Service Sector > TOURISM SECTOR > p. 428
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