Services imports into India in the month of April showed a marked decline of 28.41% to $6.5 billion as compared to previous month’s number of $9.08 billion according to the provisional data released by the Reserve Bank of India (RBI). The RBI data included travel, transport, construction, insurance and pension services, financial services, charges for the use of intellectual property, telecommunications, computer and information services among the major components of the services sector exports.
On the other hand, India’s services exports also witnessed a significant contraction to $10.48 billion in April, plunging 22.95% against March’s services exports reading of $12.89 billion. Amid a gloomy global scenario where developed economies are struggling to avoid another wave of slowdown while the emerging ones too are cooling down at an accelerated pace, the demand for Indian services has been impacted adversely. Meanwhile, the domestic macro-economic concerns including elevated inflation levels, the depreciating rupee, higher borrowing costs, widening current account and fiscal deficits etc too have had their share of toll on the services sector.
Over the past decade, services exports from Asia’s third largest Indian economy have grown at a swift pace. Except for the financial year 2009-10 where exports dipped by 9% and FY 2011-12 where growth was just 4% owing to global slowdown, services exports have been growing at an average yearly rate of 25 percent in last 10 years. Services exports has recorded more than six-and-a-half- fold increase in 10 years from $20.76 billion in 2002-03 to $138 billion in 2011-12.
The RBI comes up with the provisional aggregate monthly data on India’s international trade in services with a lag of 45 days. The data undergoes revision in the quarterly Balance of Payments (BoP) data. The October-December BoP data was released on March 30, 2012. According to the provisional data of RBI, services exports in the last quarter of FY 2011-12 stood at $35.14 billion while services imports bill was at $23.16 billion.
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