India's Service Sector Set to Surpass Merchandise Exports by 2030

India is predicted to see its services exports surpass merchandise exports by 2030, reaching USD 618 billion. Key sectors driving this growth include software and IT services, and Other Business Services (OBS). Emerging technologies like AI and IoT are enhancing opportunities, diversifying IT exports, and reducing dependency on the US market.

India is on the verge of a transformative shift in its export dynamics. The Global Trade Research Initiative (GTRI) has projected that by 2030, outbound shipments from the service sectors will surpass merchandise exports, reaching an impressive USD 618 billion.

Between 2018-19 and 2023-24, the country's merchandise exports grew at a compound annual growth rate (CAGR) of 5.8%, whereas services exports accelerated at a remarkable 10.5%. Major contributors include software, IT services, and Other Business Services (OBS), accounting for a combined 86.4% of total service exports in the last fiscal year.

GTRI highlights emerging technologies like generative AI and IoT as catalysts for this boom. However, to sustain the momentum, diversification of IT exports beyond the US is crucial, alongside an emphasis on high-value services like digital transformation to mitigate risks from automation and US policy changes.

(With inputs from agencies.)