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Focus on export boosting services to mitigate trade deficit: Economic Survey
The Economic Survey 2019-20, tabled in Parliament by Finance and Corporate Affairs Minister Nirmala Sitharaman said India should focus on export boosting services during bilateral trade negotiations to mitigate deficit with trading partners.
India should focus on export boosting services during bilateral trade negotiations to mitigate deficit with trading partners, the Economic Survey 2019-20 said on Friday.
The survey was tabled in Parliament by Finance and Corporate Affairs Minister Nirmala Sitharaman.
As per the pre-Budget survey, services exports have outperformed goods exports in the recent years, due to which India's share in the world's commercial services exports has risen steadily over the past decade to reach 3.5 per cent in 2018, twice the share in world's merchandise exports at 1.7 per cent.
The survey showed that Foreign Direct Investment (FDI) inflows into India's services sector rose by 33 per cent during April-September 2019, touching $17.58 billion.
It said that rise was driven by strong inflows into sub-sectors such as "information and broadcasting, air transport, telecommunications, consultancy services and hotel and tourism".
Furthermore, the pre-Budget survey observed that various high-frequency indicators such as air passenger traffic, rail freight traffic, port and shipping freight traffic, bank credit, IT-BPM (Business Process Management) sector revenues, foreign tourist arrivals and tourism foreign exchange earnings suggests a moderation in services sector activity during 2019-20.
"However, on the bright side, FDI into services sector has witnessed a recovery in early 2019-20 and services exports have maintained their momentum during April-September 2019," the survey said.
At present, the services sector accounts for about 55 per cent of the economy and Gross Value Added (GVA) growth, two-thirds of total FDI inflows into India and about 38 per cent of the total exports.
The sector's share of the Gross State Value Added in 15 out of the 33 states and UTs now exceeds 50 per cent.