India's export cushion

Rising services surplus is likely to offset the goods trade deficit in the short and medium term

Some meaningful shifts have happened in India’s services economy. On a net basis, services exports are raking in $60 billion per year more in revenues than in the pre-pandemic period. This has provided much-needed relief on the balance of payments front.

And it’s not just inflation bumping these numbers up. At 40 per cent higher than pre-pandemic levels, services exports adjusted for inflation have outpaced high-tech, medium-tech and low-tech goods exports by a considerable margin.

In fact, India’s services continue to gain global market share, even as the share of goods seems to have flat-lined. 

So what’s going on? We’ve