India's Exports Of Software Services Up 4% In FY21

Reserve Bank released the data related to the 2020-21 round of its annual survey on exports of computer software and information technology enabled services. The survey collects details on India's exports of software services {computer services and information technology enabled services (ITES)/business process outsourcing (BPO) services} as per type of activity, on-site/off-site nature of services, country of destination and four modes of supply. For 2020-21 round of the survey, 6115 software export companies were contacted, of which 1815 companies responded, which included most of the large companies.

India's exports of software services (excluding exports through commercial presence) are estimated at US$ 133.7 billion during 2020-21, registering 4% growth over the previous year. Computer services and ITES contributed 65.3% and 34.7%, respectively, of the total software services exports.

BPO services were the dominant component of exports of IT enabled services. Over half of the exports of software services were made by private limited companies. The United States was the major destination for software exports accounting for 54.8%; Europe had 30.1% share, nearly half of which was in the UK.

The US dollar was the principal invoicing currency for software exports with 72% share; Euro and Pound sterling together accounted for another 15.9%.
The share of off-site mode of exports of software services has increased gradually to 87.1% in 2020-21 from 80.1% five years ago.

The share of mode-1 (cross-border supply) in India's exports of software services increased further to 78.4% in 2020-21: this share of mode-1 has been increasing over the years from 38.8% in 2002-03 to 64.6% in 2009-10 and further to 75.1% in 2019-20, at the cost of the other three modes of delivery {viz., mode-2 (consumption abroad); mode-3 (commercial presence); and mode-4 (presence of natural persons)}.

Software exports by foreign affiliates through commercial presence, where the USA is a major destination, stood at US$ 14.6 billion in 2020-21. Total exports of software services, including services delivered by foreign affiliates of Indian companies, recorded 2.1% growth during 2020-21 and stood at US$ 148.3 billion.

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