Informist, Tuesday, Apr 23, 2024

MUMBAI – India has a comparative advantage in telecommunication, computer and information services and the potential to diversify its export basket towards other business services, Reserve Bank of India staff said in a paper published today. The paper, titled "What Drives India’s Services Exports?", was published in the RBI Bulletin for April and does not necessarily reflect the views of the central bank.

India's telecommunication, computer and information services exports made up 47% of the total services exports in 2022-23 (Apr-Mar), the paper said. With an average export growth of 9% during 2011-12 to 2022-23, the sector has grown in tandem with the global trend alongside the advancement in information technology.

"The wave of big data, Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT) and advancements in compatible hardware, generative AI, and spatial computing has opened up newer dimensions for Indian software exports," the paper said.

The latest RBI data showed India's services exports grew 5.6% on year to $311.07 bln in Apr-Feb of the previous financial year. This has helped offset a contract in goods exports, which shrunk 3.1% on year in 2023-24 to $437.06 bln.

Volume effects have been the major driver of India's services exports, rather than price effects. This has translated to a higher trend in exports that have benefitted from better infrastructure and technology. At the same time, global demand and relative price impact India's services exports, the paper said.

To harness the benefits of digitalisation and generative AI, a supportive policy environment would be critical, the paper said. Additionally, policies to attract foreign direct investment in the services sector could provide a further boost to India's exports of services in the medium to long-run. End

Reported by Siddhi Chauhan and Aaryan Khanna

Edited by Aditya Sakorkar

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.