How big is the recovery in service exports likely to be in the coming year?

India’s services exports, as opposed to the physical merchandise exports, are expected to touch $325 billion FY23. That would be nearly 30% higher than the expected service exports level of $250 billion in the current year FY22. This bounce is likely to happen on the back of full resumption of most contact intensive services. Service exports are not reported by the Ministry of Commerce but by the RBI with a 1-month lag, and largely led by IT services.

For FY22, the services exports are pegged to touch $250 billion which is reasonable with $209.83 billion already achieved till Jan-21 and 2 more months to go. The new foreign trade policy has given a boost to outbound services. For instance, the government has already announced the Services Export from India Scheme (SEIS) and the Duty Remission on Export of Services Scheme (DRESS). Services exports have grown at 9% CAGR for last 20 years.