India exported $250 billion worth of services in 2021-22, a new record, commerce minister Piyush Goyal said on Wednesday.
Goyal, who previously announced a record $400 billion in merchandise exports in 2021-22 on the basis of provisional data, raised the figure to $419.65 billion on Wednesday.
That puts total exports from India at almost $670 billion in 2021-22, a number that is sure to put India among the top 10 exporters in the world by value.
The country’s mercantile trade deficit has, however, increased by 55% during the period because of high prices of crude oil, metals and other inputs, in addition to an inventory build-up by the domestic industry to pre-empt supply-chain disruptions on account of the Ukraine war.
According to official data, India’s merchandise trade deficit in March was $18.5 billion, with exports increasing by about 20% to $42.22 billion and imports increasing 24% to $60.74 billion. In 2021-22, India’s merchandise exports increased to a record $419.65 billion, but imports jumped to $611.89 billion, leaving a deficit of $192.24 billion.
Federation of Indian Export Organisations (FIEO) director general and CEO Ajay Sahai said that the rise in trade deficit is “not worrisome” as it is “roughly 6.2% of the GDP, which is also expanding.”
{{/usCountry}}Federation of Indian Export Organisations (FIEO) director general and CEO Ajay Sahai said that the rise in trade deficit is “not worrisome” as it is “roughly 6.2% of the GDP, which is also expanding.”
{{/usCountry}}He added that the industry is building inventory to avert any supply chain crisis. “High prices of crude and metals have also impacted the trade deficit. I’m hopeful that the deficit will fall after the supply situation improves,” he said.
The minister said the government would set new export targets for 2022-23 soon. Exports for both goods and services surpassed targets set by Prime Minister Narendra Modi, because the government set ambitious but practical goals across sectors, and after intense consultations with all stakeholders, he said. “Instead of top-down, we have a bottom-up approach,” he explained.
The target for services exports in 2021-22 was initially $225 billion, which was later raised to $240 billion, he said. The previous record was $213 billion in 2019-20, he added.
Services exports in 2020-21 were severely hit because of the Covid-19 pandemic, and aggregated around $195 billion. Goyal said the government will soon start consultations with stakeholders to fix exports targets for the current financial year. “From Friday, I am starting a round of talks with export promotion councils,” he added.
The minister said record services exports could be achieved because “our services sector is moving up the value chain from low-cost services”, with significant contributions of professionals such as management consultants, accountants, company secretaries, engineers and architects.
Goyal said, while the Ukraine war has disrupted the global value chain that is affecting all countries, its direct impact on India is minimal. “Our total trade with Ukraine and Russia is not very large.”