India’s services exports will exceed $240 billion, and set a new record this year (2021-22), says Sunil H. Talati, chairman of the Services Export Promotion Council (SEPC). The growth will be spread across services sectors with travel and tourism the only exceptions, he says.
The services exports will have to grow 15- 20% during the current financial year from $206 billion it registered in 2020-21 to achieve this target. The services exports have been growing approximately 20% on a year-on-year basis from August-October 2021. The Reserve Bank of India data shows that the value of services exports in October 2021 was $19.9 billion, as against $16.6 billion the same month the previous year. It was $20.7 billion (as against $17.3 billion) in September and $19.6 billion (as against $16.4 billion) in August. “The exports slid about 4% in 2020-21 as compared to 2019-20 ($213 billion) because of Covid-19, hence a 20% growth in services exports post-pandemic, is a very positive sign”, Talati tells Fortune India.
Incidentally, services exports, in general, didn’t fare too badly even during the pandemic year. In spite of the significant decline in foreign exchange earnings, from services like travel, tourism, healthcare, education etc., the decline in overall growth was only marginal in 2020-21. The IT sector—which accounts for the biggest share of services exports—grew 5% in 2020-21. Similarly, consultancy services grew 12.8%, and construction and related engineering services grew 24.8% to partially compensate for the losses from travel and tourism services.
Talati says that the general growth trend will continue in the coming months. “IT is taking the lead, but medical, education, accounting and auditing segments of the services sector are also doing well. In addition, travel and tourism, the entertainment sector along gaming have great potential. If the five lakh e-visas are issued and travel cost comes down, that will also have a positive impact on these growth sectors”, he adds.