Statsguru: Optimism about growth of India's commercial services exports

India’s commercial services exports increased at a compound annual growth rate (CAGR) of 11 per cent during this period to over $340 billion, while the global growth was around 5.5 per cent, noted a recently released report by global financial services major Goldman Sachs. It will touch $800 billion by 2030, according to estimates in the report, suggesting a CAGR of 12.8 per cent.

The last decade saw a growth rate of 8.7 per cent, which made India one of the fastest-growing exporters of commercial services.



However, recent trends show a decline in growth rates. The monthly services export figures for March 2024 came in at $30 billion, a 1.3 per cent year-on-year dip. Overall, exports went up by 4.9 per cent in the financial year, the slowest pace in three years.

An April 2024 study in the Reserve Bank of India’s (RBI) monthly bulletin noted that long-term growth rates have been rising, helped by infrastructural developments and technological advancements. Globally, India ranks second in terms of comparative advantage in a key sub-segment of services exports—telecommunication, computer and information services. The country’s digital services exports reached $257.1 billion in 2023, grabbing a larger global share according to World Trade Organization data.

In other segments, such as transport and travel services, the country holds the 10th and 14th positions, respectively, according to the RBI analysis. Business and management consultancy and public relations services form the largest share. Engineering services are the second-biggest component.



The emergence of India as a favourable destination for global capability centres (GCCs) has helped services. Engineering research and development accounted for around half of GCC revenues as of 2022-23.



While the big cities dominate the GCC landscape, many smaller ones are making their presence felt.

The RBI’s analysis suggested creating a relevant policy framework in artificial intelligence and working on digitalisation and foreign direct investment to maintain growth.