Economy

Commerce Ministry group to prepare strategy for growth of services exports

Amiti Sen New Delhi | Updated on August 22, 2021

Will coordinate with States, industry to diversify export basket

Seeking to formulate a strategy for the growth and diversification of services exports from the country and also assess its true growth potential, the Commerce Ministry has set up a steering group to coordinate with various State governments and other Ministries and departments concerned on the matter.

“India’s services exporters have done well mostly on their own without much attention from the government. But the fact that more than 60 per cent of services exports is from the IT and related sectors points to the tremendous growth potential that exists if the government focusses on diversification. The steering committee will hopefully come up with useful policy suggestions in that direction,” an official told BusinessLine.

Main objective

The broad objective of the steering group formed recently, comprising senior officials focussing on trade with specific regions and countries, is to periodically review and suggest strategies to enhance service exports. This is also important in the backdrop of the informal target of achieving services exports worth $700 billion by 2027-28. In 2020-21, India’s services exports were about $205 billion, while goods exports were valued at $290 billion

The group will try and build synergies in programmes and schemes undertaken for increasing services exports in nodal Ministries and Departments, such as pharmaceuticals, agriculture, textiles and heavy industries. It has also been tasked to examine State level initiatives on services and try to build convergence with Central policies.

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“The group shall also review and suggest strategy on engagement with line Ministries/Departments for bringing in an export orientation in domestic sectoral polices and for pursuing necessary regulatory reforms,” per an office memorandum on the constitution of the steering group. It will take inputs from export promotion councils and other industry bodies through regular engagement, the official added.

While software services exports, at $128 billion in 2019-20, account for a major chunk of India’s services exports, sectors such as tourism, e-learning, and medical services, too, hold potential.

In FY20, 39 million jobs were created in the tourism sector in India, accounting for 8 per cent of total employment in the country, according to data shared by the Services Export Promotion Council (SEPC). The number is expected to reach 52.3 million jobs by 2028. India’s tourism exports are to the tune of $30 billion, and an overall market share of over 2.1 per cent.

“There is a huge potential for growth in various services sector, including IT and software, and the government believes this can be achieved with proper focus and coordination between various agencies,” the official said.

Published on August 22, 2021

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