Exports: As services catch up with goods, should India's focus shift?

The country would need push forward on both for medium-term sustainability, say economists

India’s services exports have of late been catching up with merchandise export. In January this year, the two were almost equalled at over $32 billion each.

If the trend persists, this may give some credence to Reserve Bank of India (RBI) Governor Raghuram Rajan’s theory that the country should focus on the growth of services export and not mimic China to become a manufacturing giant – an attack on the government's production-linked incentive (PLI) scheme.

However, the question is: will this trend persist once external conditions normalise?

Merchandise exports declined for the second straight month in January year-on-year due to