India’s software exports reach US$ 320 billion in FY23

This has increased the country’s share in global computer services exports to about 11%

April 18, 2023

The overall services exports share has been 4% in 2022

The surge in services exports is primarily driven by the computer, information technology (IT), and telecom-related sectors

Net service trade under the balance of payments (BoP) increased from a monthly average of US$ 7.3 billion in 2019 to US$ 12.9 billion in 2022

The country's overall exports including services increased 13.84% to a record US$ 770.18 billion in FY23

India’s software exports reached a record high of US$ 320 billion in FY23, increasing its share in global computer services exports to about 11%, according to a report from DBS Group. 

Even though the country’s overall services export share remained at about 4%, experts believe that the strong services trade performance will contribute to the improving external balance dynamics in 2023, with falling commodity prices helping as well.

The DBS report showed that the country’s share in computer services exports in global trade is a significant 10-11%, while the overall services exports share has been only 4% in 2022. The experts further mentioned that the net service trade under the Balance of Payments (BoP) increased from a monthly average of US$ 7.3 billion in 2019 to US$ 12.9 billion in 2022, and is expected to touch a new high of US$ 13.5 billion in early 2023.

The surge in services exports is primarily driven by the computer, information technology, and telecom-related sectors, accounting for nearly half of the overall services exports under BoP at US$ 125 billion. Among these, computer services make up the majority, accounting for two-thirds of total software service exports, followed by IT-enabled services. In terms of software exports, 55.5% are destined for the US, followed by Europe, with nearly half of those going to England.

On a full-year basis, services exports rose to a new high of US$ 320 billion in FY23, up from US$ 255 billion in FY22. Despite an increase in import payments, the full-year services trade surplus rose to US$ 142 billion, over a third higher than FY22. Boosted by a surge in services, the country’s overall exports including services increased 13.84% to reach a record US$ 770.18 billion in FY23, while overall imports rose 17.38% to US$ 892.18 billion over FY22.

According to the commerce ministry data, this will bring the current account deficit back to a comfortable sub-2% of the Gross Domestic Product (GDP) in FY23. The report also showed that as a percentage of GDP, the share of services trade under BoP rose from 3% in 2019 to 4.6% in 2022, and is expected to have increased further in the first quarter of 2023.

Source: Economic Times

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