New Delhi: India’s service sector exports will surpass the country’s goods exports by 2030, marking a major shift in the trade sector. This information is provided in the report by the economic research institute Global Trade Research Initiative (GTRI).
According to the report ‘India’s Services Export Revolution: Ahead of Exports by 2030’, services exports are likely to reach $618.21 billion by fiscal year 2030 (FY30), a slightly less than exports of goods (613.04 billion dollars).
fast growing figure
Between FY 2019 and FY 2024, services exports are expected to grow at a compound annual growth rate (CAGR) of 10.5%, almost double that of goods exports (5.8% CAGR) .
indian force
The rise of the service sector came mainly from two key sectors: software and IT services and other business services (OBS). These two contributed 86.4% of total services exports in FY24.
Software and IT Services: This category contributed $190.7 billion (56.2%) in FY24. Due to innovations in Artificial Intelligence, Internet of Things and digital transformation, the demand for these services is continuously increasing globally.
Other Business Services (OBS): Services such as legal, tax, consulting and market research contributed $102.8 billion (33.2%) in FY24. This sector has the potential to grow faster than services of IT.
needs to improve
According to the report, despite strength in IT and OBS, India lags in global services sectors such as transportation, travel, financial services and insurance, which account for 64% of global services trade.
Business Performance in FY24
Goods exports: $437.06 billion ($451.07 billion in FY23)
Goods imports: $677.24 billion ($715.97 billion in FY23)
Services exports: $339.62 billion ($325.33 billion in FY23)
Services imports: $177.56 billion ($182.05 billion in FY23)
Total trade deficit: $78.12 billion in FY24, up from $121.62 billion in FY23.
way forward
The GTRI has given the following suggestions to increase services exports:
- Increase the export of IT services beyond the United States to other markets as well.
- Promote OBS in other markets outside the Gulf countries.
- Expansion into underrepresented sectors such as transportation and financial services.
- Improve data transparency and integration with services to take advantage of manufacturing growth.
“With the right policies and investments, India’s services sector can continue to grow, underpinning the country’s economic ambitions and strengthening India’s position globally,” the report said.
