India’s Services Exports to Cross the Goal of 300bn $ in this Financial Year

The country’s services exports are doing “extremely well” and going by the current trend these outbound shipments would register about 20 per cent growth in this fiscal and cross the USD 300 billion target despite global economic uncertainties, Commerce and Industry Minister Piyush Goyal has said. He said that on the merchandise front also, exports are so far registering healthy growth despite the world being under recession, huge inflationary pressure, and overstocking of various commodities. With all these stress, where every global leader is talking of “very” tough times, India’s exports rose 9 per cent year-on-year during April-December 2022-23.

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India’s Big Aim of Service Export:

The Ministry of Commerce and Industry announced that it is working on a plan to reach a services export target of USD 1 trillion by 2030.

What is the current exports scenario:

• Globally, services trade accounts for less than 20% of total trade.
• In India’s case, if all of exports (including oil and gems & jewellery) is taken, then the share of services is 40%.

Overall Export Performance:

• During April-December 2022-23, overall exports rose 9 per cent to USD 332.76 billion while imports increased 24.96 per cent to USD 551.7 billion. Trade deficit during the nine-month period widened to USD 218.94 billion as against USD 136.45 billion in April-December 2021-22. In last fiscal year, the country’s merchandise shipments touched an all-time high of USD 422 billion.
• According to the data of the commerce ministry, the estimated value of services export in April-December 2022 is USD 235.81 billion as compared to USD 184.65 billion in the year-ago period. In 2021-22, these exports touched an all-time high of USD 254 billion.
• India’s exports contracted 12.2 per cent to USD 34.48 billion in December 2022, mainly due to global headwinds, and the trade deficit widened to USD 23.76 billion during the same period.

Services Sector in India:

India is the world’s seventh-largest services exporter. Share of the services sector accounted for 54% of the total Gross Value Added (GVA) in FY21. The services sector is a key driver of India’s economic growth, providing employment to nearly 26 million and contributing about 40% to India’s total global exports. The services sector has also been the largest recipient of foreign direct investment, making up for 53% of the total inflows between 2000 and 2021.

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