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External Sector 99

Figure 10: Rising Services Exports and Imports

Services Exports Services Imports
70
61 60
60 55 56 56
52 53 53 50 53
50 47

US$ Billion 40 32 32 33 31 26 29 30 33 30 36 37

30
20

10
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3*
2019-20 2020-21 2021-22 (P)
Source: Reserve Bank of India and Department of Commerce
Note: *: Based on estimates; P: Provisional

3.31 Computer services exports continue to be the largest exported service in H1: FY 22,
constituting about 49 per cent of total services exports. They exhibited positive sequential
growth since Q2: FY 21 on account of increasing demand for digital support, cloud services
and infrastructure modernisation owing to new pandemic challenges. Exports of business
services – the second major segment – also showed recovery underpinned by improvement in
professional, management and consultancy services. The transportation services exports grew
by 40.7 per cent in H1: FY 22 to US$ 14.3 billion due to increase in cross-border trade activity
and the shortage in shipping containers impacting transport costs. The quarterly component-
wise services exports data is presented in Annexure II.

3.32 The strong growth witnessed in services exports may also be attributed to key reforms
undertaken by Government, which inter alia include liberalizing the Other Service Providers
(OSPs) in November 2020 and further in June 2021 announcing reform package for Telecom
sector to infuse liquidity, encourage investment and reduce regulatory burden on the telecom
service providers. (Refer Box in Chapter on Services)

Services Imports

3.33 Services imports rose by 21.5 per cent to US$ 103.3 billion in 2021-22 (April-December)
from the corresponding period a year earlier (Table 4) and 6.2 per cent over 2019-20 (April-
December), crossing the pre-pandemic levels. The surge in services imports is mainly on
4
account of payments for business, transport, travel and computer services, which together
constitute more than 75 per cent of services imports. Like in the case of services exports,
India’s imports of services also reported slowdown in Q1: FY 21 due to pandemic induced
lockdown. However, they improved subsequently and touched US$ 37 billion in Q3: FY 22
(Figure 10).

4 The data for December 2021 is an estimation, which will be revised based on RBI’s subsequent release. The latest data for services sector
released by RBI is till November 2021.