The services sector plays a crucial role in shaping a country’s economy, enhancing efficiency across industries. Essential services such as transport, financial, and telecommunications services enable the movement of people, goods, and capital internationally. The sector’s share reached 65.7% of the gross domestic product (GDP) globally in 2020, with world trade in services increasing from 6.0% to 13.6% of GDP between 1990 and 2019. This growth has also led to a significant increase in employment, with 51% of the global workforce now in services, 17% up since 1991. This article examines the growing significance of the services sector in trade, employment, and economic growth, focusing on intra-industry trade (IIT) among South Asian nations. Using data from the Trade in Services database of Organization for Economic Cooperation and Development (OECD) and World Development Indicators (WDI), the study finds that significant sectoral shifts in IIT, particularly in Afghanistan and India, highlight dynamic changes in trade profiles. Further, trade imbalances (TRIMs) and differences in income per capita are found to have a negative impact on the intensity of IIT, while trade orientation (TO) positively impacts it, suggesting that more trade-oriented nations have higher IIT. The findings demonstrate the importance of balanced trade relations and suggest that historical trade conditions continue to influence trade within the industry.
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