Services exports jump all-time high at $254.4 bn in FY22

NEW DELHI: India’s services exports surged an all-time high at $254.4 billion in the fiscal year ended March 31, which also saw record monthly high in the last month of FY-22 at $26.9 billion despite disruptions in tourism, hospitality and aviation due to Covid-19 besides crumbling of the global supply chain amid the Ukraine crisis.

“The new record achieved in 2021-22 beats the previous high of $213.2 billion in 2019-20,” a commerce ministry statement said, citing provisional data. India has also reported record merchandise exports at $421.8 billion in 2021-22, according to official data.

India’s overall exports — services and merchandise — hit $676.2 billion in 2021-22, it said. The country’s overall exports were $526.6 billion and $497.9 billion in 2019-20 (non-pandemic year) and 2020-21, respectively. Sectors such as telecommunications, computer, and IT services, other business services and transport are the top contributors in services exports, the ministry said, citing sectoral data for April-December 2021.

“It is a remarkable achievement by the services sector as we crossed the $254 billion mark despite tourism, hospitality and aviation services largely remain adversely impacted due to Covidrelated restrictions in the last fiscal. With the pandemic under control pushing Mode 2 of services and focus on IT and digitisation, we should aim at $350 billion in 2022-23,” said Ajay Sahai, director general and chief executive of the Federation of Indian Export Organisations (FIEO), an industry body.

According to a government official, who asked not to be named, India has over $100 billion trade surplus as far as services exports are concerned, which would help in reducing overall trade deficit significantly. The provisional trade data released by the commerce ministry on April 13, 2022 estimated mercantile imports at around $612 billion, leaving a deficit of around $190 billion.

“Merchandise trade deficit is mainly due to skyrocketing international oil prices as India imports more than 85% of its crude oil requirements,” the official said. According to Petroleum Planning and Analysis Cell (PPAC), the datakeeper of the petroleum ministry, India’s average crude oil purchase bill surged by $100.76 in 2021-22 at $79.18 a barrel compared to $44.82 per barrel in 2020-21.

Sahai said the rise in trade deficit is “not worrisome” as it is roughly 6.2% of the GDP, which is also expanding and we had managed much higher deficit than $192 billion in the past. He said the industry is building

inventory to avert supply chain crisis. “High prices of crude and metals have also impacted trade deficit. I’m hopeful that the deficit will fall after supply situation improves,” he said.

The government had initially set a target of $225 billion services exports in 2021-22, which was later raised to $240 billion.