After a zooming trade deficit, India may have some more bad news on the balance of trade front – slowing services exports.
Services exports, jargon for payments made by foreigners in return for services in India, grew at just 5.9% in the first three quarters of the last financial year (2011-12).
In comparison, services exports — primarily earned by workers in the IT and BPO and hotel industry in India — had grown 38.4% in the previous year.
If the growth rate does not pick up, total services export will only rise to about $141 billion from the previous year’s $133 billion. India had a negative trade gap of $185 billion in goods trade with the rest of the world last year, most of which is funded by services earnings.
The figures are slightly disappointing when compared with Nasscom;s numbers for the year. Nasscom, the association of BPO and IT services companies, had reported a 16.3% rise in IT-BPO exports to $69 billion last year.
However, Nasscom had also predicted IT-BPO exports to grow only 11-14% this year.
The services exports growth of 5.9% is well below the 21% growth that goods exports saw last year.