Predominantly digital exports fuel India's services trade, shows data

Segment accounts for over 15 per cent of total goods and services exports for India, others

The share of exports which are predominantly delivered through digital means has been rising during the pandemic.

They rose from accounting for 26.4 per cent of exports in 2019 to 28.6 per cent in 2022 in India, shows data from a joint World Bank and World Trade Organisation report released on Monday entitled, ‘Trade in Services for Development’.


 

These exports include information and communications technologies (ICT), finance and other business services, according to the report.

“Export growth in less traditional services has helped to diversify the export baskets of many developing economies…. for a number of developing economies, ICT, finance and other business services, which are predominantly exported digitally, accounted for over 15 per cent of total exports of goods and services,” it said.

“The experience of India and the Philippines as global leaders of trade in computer services and in business process outsourcing services illustrates the growth potential of trade in non-traditional services,” it added.

These services also help bring in better gender parity, noted the report.  Women account for 34 per cent of India’s information technology workforce, as per the report. India’s female labour force participation rate was 24 per cent in 2022, according to World Bank numbers. Similar effects are seen in the Philippines where 54 per cent of business process outsourcing (BPO) services employees are women, compared to an overall female labour force participation of 46 per cent.

The report noted that there has been a boom in services exports since 2005 with ‘exports of digitally delivered services experiencing the fastest growth, increasing almost four-fold.’

India’s share in global commercial service exports has increased from 1.95 per cent in 2005 to 4.44 per cent in 2022, according to the report. China had a higher share in 2005, and continues to have an edge. But the gap has narrowed. China’s share increased from 2.94 per cent to 5.29 per cent in the same period (chart 2).
 

While India’s share in global commercial service exports increased in 2022 from the previous year, China's share declined from 5.52 per cent in 2021.

Around 144 million people were employed in the services sector in India in 2021, according to the data from International Labour Organization (ILO). The share of services in total employment has increased from 21.6 per cent in 1991 to 30.7 per cent in 2021.

Industry too saw an increase from 14.9 per cent to 25.3 per cent in the same period. While agriculture continues to be the major source of employment, its share in total has declined from 63.5 per cent in 1991 to 44 per cent in 2022 (chart 3).