Service trade of India - Economic Survey 2011-12
The services sector covers a wide range of activities from the most sophisticated information technology (IT) to simple services provided by the unorganized sector, such as the services of the barber and plumber. National Accounts classification of the services sector incorporates trade, hotels, and restaurants; transport, storage, and communication; financing, insurance, real estate, and business services; and community, social, and personal services. In World Trade Organization (WTO) and Reserve Bank of India (RBI) classifications, construction is also included.
The data available in the survey is computed mainly from RBI. RBI segregates the services trade data into the major heads of Travel, Transportation, Insurance, GNIE (Govt. not included elsewhere) and Miscellaneous. The Miscellaneous head includes important sub-heads which are Software and Non-software services. Under Non-software, business service, financial service and communication are included. There is also a section on services sector in India in the survey which throws light on the sector specific topics, including trade.
One must remember that not all services are traded. However, more and more services are becoming tradeable due to developments in technology.
Global trade in services has more or less mirrored the trend in merchandise trade, and, by corollary, international demand. World exports of services have shown consistent rise in the 2000s decade with a healthy average annual growth of around 9.5 per cent, except in 2001 and 2009— periods of global slowdown and economic crisis.
Some points from the survey chapter:
- The total trade in commercial services is around USD 3.7 trillion and is dominated by the developed western countries in terms of share except for China, India, and Singapore. Source - International trade statistics 2011.
- The services trade (as well as merchandise trade) in world, has not reached pre-crisis levels yet. However, the rapid bonce back is happening in Asia, where services exports rose by 22 percent in 2010 led by India and China.
- Top 5 exporters and importers of commercial services are the EU(27), the US, China, Japan and India with the same ranks both in exports and imports of commercial services.
- For year 2010-11, services exports from India was 132.9 billion dollars and services imports was 84 billion dollars.
- Services exports from India grew by 38.4% in year 2010-11 and imports by 40%
- For the year 2011-12 (apr-sept, i.e. half year), services exports was USD 58 billion and imports was USD 36.6 billion.
- The percentage shares of top five heads for India are: Software 45.2%, Business services 15.9%, Travel 12.9%, Transportation 12.8% and financial service 4.2%.
- The value of trade in USD Billion for 2010-11 for the above heads are: Software 55.6 billion, business 24.1 billion, travel 15. 3 billion, transportation 14.3 billion and financial services 6.5 billion dollars.
- In imports, the top five heads for India are: business services (34.3%), transportation (20.7%), travel (19.1%), financial services (10.9%), insurance and communication (2% each).
- A consistent increase in surplus on account of India's service exports has been a cushioning factor for financing a large part of the trade deficit on the merchandise account in recent years.
- For the past five years, services trade surplus has financed around 41% of our merchandise trade deficit.