The sector alone contributes over 40% of India’s export basket.
The government is mulling incentives for the services sector in the Foreign Trade Policy which is expected to be announced in mid-August. The sector, which alone contributes over 40 per cent of the country’s overall export basket, has been grappling with a global demand spiral since the economic recession set in the last fiscal.
“We are talking to the services sector as it makes a substantial contribution to our global commerce, particularly exports. They have made a few presentations. We are talking to all the stakeholders before we formulate the Foreign Trade Policy for the next five years. The policy will address the short-term challenges of the sector,” Commerce and Industry Minister Anand Sharma said. The minister, however, refused to divulge the details of the incentive package.
India, at present, accounts for 2.7 per cent of the global services export market. “India has the potential to increase its share in the world market in services exports to 4-5 per cent in the next three years,” Sharma said.
The ongoing global economic slowdown has impacted India’s services sector which accounts for over 50 per cent of the country’s gross domestic product (GDP). India’s services exports registered 12.2 per cent growth at $101 billion in 2008-09, compared with a 23.3 per cent increase in the previous year.
Currently in India, 58 out of 150 million jobs in services sector are being affected by the crisis. However, 70 per cent of the incremental GDP growth, over 60 per cent of new jobs and 50 per cent of India ’s exports in next five years would come from services sectors.
