Service exports growth in India is lower than global average: Data

Bangladesh's service exports grew faster; Asia's growth averaged 16.9% compared to India's 16.6% growth in service exports

On Wednesday, commerce minister Piyush Goyal announced that India’s service exports had crossed the $250-billion mark in 2021-22, registering a 20 per cent growth over the last year. While the government had set a $240 billion target for service exports, the final quarter push ensured that service exports surged to $249.24 billion. 

A Business Standard analysis of monthly exports shows that average exports until December were a tad less than $20 billion per month. Average monthly service exports were $23.5 billion in the last three months. 

Even though exports have grown 20 per cent, imports grew faster at 23.2 per cent to $144.8 billion in 2021-22. In seven years, the service trade balance crossed the $100 billion mark for the first time. 
 

A comparison with other economies shows that India's growth in service exports wasn’t as phenomenal as the government would have wanted. Analysis of estimates from WTO indicates that India’s service export growth for the calendar year 2021 was in line with the WTO average, but lower than global average. Neighbours Bangladesh and Pakistan registered over 20 per cent growth in service exports, whereas China recorded a 40.5 per cent rise in service exports. 

India’s export growth was also lower than Africa's and Asia's average. Africa recorded a 17.5 per cent growth in service exports, whereas Asia’s exports grew 16.9 per cent during this period. 

India’s share, however, in global service exports has risen in the last seven years. In 2015, India’s share in global service exports was 3.1 per cent, which rose to 3.9 per cent in 2021.

The growth in service exports was driven by a 40 per cent increase in goods-related services and a 33.7 per cent increase in transport services like shipping. Goods related services include manufacturing services on physical inputs owned by others and maintenance and repair services.

On the other hand, travel declined 44.2 per cent in 2021 compared to 2020. 

In terms of imports, the growth was driven by transport services, which increased 48.9 per cent in the first three quarters of 2021, compared to the three quarters of last year.

Insurance and pension service imports increased 42.4 per cent compared to last year. Personal, cultural and recreational services rose 47.5 per cent.