India's services exports rise record 27% in FY23, shows RBI data

According to data provided by the Reserve Bank of India (RBI), India's services exports soared by a record 26.6% in 2022-23 to US$ 322 billion, bridging the gap with merchandise exports, which climbed only 6% to US$ 447 billion at the same time.

India's service exports span from information technology (IT) to services offered by doctors and nurses abroad. While the RBI does not publish monthly disaggregated data on services exports, its quarterly classification of services exports released with the balance of payment data includes transport, travel, construction, insurance and pensions, financial services, telecommunications, computer and information services, and personal, cultural, and recreational services, as well as other business services.

While software exports continue to dominate India's services exports, "other business services" exports have recently increased significantly, accounting for 24% of total services exports in the first nine months of FY23 (April-December), up from 19% in FY14.

Legal services, accounting, auditing, bookkeeping, and tax consultancy services; management consulting, managerial, and public relations services; and advertising, market research, and public opinion polling services are all included in this area.

Kotak Institutional Equities released a report in April that said, the developing global capability centres (GCC) in India were fuelling growth in business services. It further stated that “India’s large supply of requisite labour pool and large wage differential with developed markets will likely provide adequate labour supply for growth in business services exports from India. The top-down macro factors look very favourable. Meanwhile, we await more clarity on the bottom-up composition of these exports, given the sharp jump in exports over the past few quarters.

The government has set a goal of US$ 2 trillion in combined goods and services exports by 2030.

According to World Trade Organisation data for 2021, India has a 4% proportion of global commercial services exports and a 3.52% percentage of global commercial services imports. India has a 1.77% proportion of global exports and a 2.54% share of global imports in merchandise trade. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.