Services exports dip in July to $10.40 bn

Showing adverse effect of global economic uncertainty, India’s services exports dipped in July 2011 to $ 10.40 billion from $ 11.04 billion in June. This is fall for a second month in row.

Proceeds from exports had declined in June 2011 from May 2011 ($ 11.83 billion).

According to Reserve Bank of India data imports, payments for services, also declined to $ 5.8 billion in July 2011 from $ 7.2 billion June. Imports for May 2001 stood at $ 7.0 billion.

Brinda Jagirdar, General Manager and Head of Economic Research at State Bank of India said service sectors like Information Technology (IT) are facing challenges in global economy. IT exports have large share in India services trade. Earnings from service exports help to manage current account deficit. There is moderation in domestic economic activity also. The data on services trade (exports and imports) is reflecting what is happening in real economy.

Unlike decline services, merchandise exports have been growing at an impressive speed in the current fiscal, shrugging off uncertainty in the US the debt problems in several European nations.

RBI began releasing monthly data on trade in services in this financial year. Hence, comparable data for same month in 2010-11 is not available to capture trend.