India’s Services Exports on the Road to Recovery Post the Pandemic
New Delhi: Further, in the month of June 2021 alone services exports increased at the rate of 16% YoY growth amounting to $19.72 billion. With the end of the Q1 2021 we have jumped up one position in global export performance and now ranked the 6th biggest service exporter in the world (2021 Q1 as per IMF estimates). This is further corroborated by the fact the IHS Markit India Services PMI increased to 45.5 in July 2021 from 41.2 in June, even after the badly affected services sectors such as Travel and Tourism, Education, Medical Value Travel, Aviation, etc are on the long road to recovery.
“India’s services exports have been consistently performing well in the recent months and taking an optimistic projection, the services sector is expected to grow at 28% in 2021-22 taking India’s total exports to nearly $ 266 billion showing an increase of more than $ 58 billion in a year,” said Mr Maneck Davar, Chairman of Services Export Promotion Council (SEPC). Moreover, in the the first quarter of 2021 services exports stood at $ 54 billion in line with this optimistic trend. Mr. Davar further added that the increased growth can be attributed to the promising growth figures by sectors such as professional and management consulting services, audiovisual and related services, freight transport services, telecommunications, computer and information services during the time of pandemic. “This performance would be better and sustainable if the Government continued to incentivize the sector,” Mr Davar emphasized.
Elaborating further on incentives to Services Exports, Mr. Davar mention that to sustain the growth in services exports, in the short term, it would be imperative for the Government to continue to support the sector firstly with the notification of SEIS 2019-20 and second ensure that the much-awaited new FTP is announced without further delay to remove the uncertainties in the minds of exporters, ensuring business continuity and give the much-needed boost and relief to the sector affected by the pandemic. He added that in the long term, the government would need to focus on access and cost of capital, giving industry recognition for a few of the sectors, and provide preferential market development grants to expand into new verticals such as charges for intellectual property rights, financial services, entertainment services including audiovisual and gaming services, auditing services, education, healthcare services, and professional and management consulting services etc.