India's services exports declined by 3.5% to $12.35 billion in June from $12.80 billion recorded in the previous month. Conversely, Imports of services also moved down to $6.22 billion in June from $6.98 billion in the previous month. During April-June period of financial year 2013-14, the cumulative services receipt or exports grew by an annual rate of 10.2% to $37.99 billion, while, total services outgo or imports stood at$ 20.58 billion during the first three months of the current fiscal.
Services are critical to India’s economic well being and constitute more than half the country’s GDP. The share of services in the GDP has risen from 33.3% in 1950-51 to 64.8% in 2012-13. Service sector includes key service exporter industries like Health Care, Tourism, Education, Engineering and Information Technology among others. India’s services export growth has been faster than that of merchandise exports, with the export of services growing at a compounded annual growth rate (CAGR) of 23.6% between 2001-02 and 2011-12, while merchandise exports grew at a CAGR of 21.4% during the same period. However, growth in services exports became erratic after the global financial crisis in 2008.
As per the World Trade Organization (WTO), India was ranked sixth in exports of commercial services, with a 3.6% global share, and in services imports, it ranked seventh with a 3.4% share. In contrast, the country was ranked 19th in merchandise exports with a paltry 1.6% market share and was in 13th position with a 2.5% share in imports.
