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324 Economic Survey 2021-22

9.22 India’s software exports, with a share of 48.5 per cent in total services exports, remained
relatively resilient during Covid-19 period with higher demand for digital support, cloud services
and infrastructure modernisation catering to the new pandemic challenges. The top software
companies have reported average revenue growth rate of above 21 per cent (in $ terms) in H1
2021-22 on account of the increased revenue from their manufacturing, financial, banking and
insurance, communication, retail, life sciences and health care segments.

9.23 Until 2019-20, India was net exporter of travel services. However, amid drop in foreign
tourist arrivals owing to the mobility restrictions imposed worldwide, travel receipts remained
below the pre-pandemic level. In April-September 2021, travel exports were US$ 3.7 billion,
which is slightly lower than US$ 4 billion in April-September 2020 and far modest than US$
14.6 billion during the same period in 2019 (i.e., pre-pandemic period). Growth in receipts
from exports of transportation services had moderated to 4.1 per cent due to slowdown in trade
activity and supply chain disruptions in 2020-21. However, with resumption in cross-border
trade activity and shortage in shipping containers impacting transport costs, the transportation
receipts posted growth of 40.7 per cent in H1 2021-22 on a YoY basis (Table 5).
9.24 Among other segments, business services exports increased by 17.1 per cent in H1 2021-
22, even surpassing the pre-pandemic levels, mainly on account of rise in receipts relating to
professional and management consultancy.

Services imports
9.25 India’s services imports exhibited sharper decline of 8.4 per cent in 2020-21 in comparison
with services exports primarily on account of fall in travel and transportation payments.

9.26 During H1 2021-22, growth of services imports was 20.7 per cent on account of relaxation
in lockdown restrictions and resumption in domestic economic activity. Among the major
sectors, payments for overseas travel rose by over 23 per cent in H1 2021-22 on YoY basis;
however, it still remained far below its pre-pandemic level. International shortage in shipping
vessels has increased the transportation cost, which is evident in escalation of 64.9 per cent in
outgo on account of transportation services during April-September 2021. Business services,
the largest category in India’s import of services, increased by 0.9 per cent in H1 2021-22.
The increase in business services payments was due to technical, trade-related, other business
services, higher outward remittances for maintenance of offices abroad.

9.27 Despite Covid-19 impacting travel and transport services exports in 2020-21, double digit
growth in gross exports of services, aided by exports of software, business and transportation
services, resulted in an increase of 22.8 per cent in net exports of services in H1 2021-22.

MAJOR SERVICES: SUB-SECTOR WISE PERFORMANCE AND
RECENT POLICIES

9.28 Most sub-sectors of the services sector, particularly, aviation, tourism and port traffic
slumped in 2020-21 with the onset of Covid-19 related global shutdown and restrictions in
movements. In 2021-22 so far, these sub-sectors have shown signs of recovery, largely reflecting
the rebound from same period last year.