India services exports to hit $800-bn mark by 2030: Goldman Sachs

India’s services exports is estimated to hit the $800-billion mark by 2030, says a new report by Goldman Sachs titled India’s Rise As The Emerging Services Factory Of The World. The report adds that the country’s share in global services exports has grown more than two times over the past 18 years aided by the rise of Global Capability Centres, or GCCs.

GCCs are offshore units that multinational corporations set up to execute strategic functions, and a spurt in this category has also added to overall economic growth, generated employment and given the real estate market a significant push, apart from expanding the scope of services exports.

The steady upward growth that should propel India’s services sector towards an estimated $800 billion revenue in about six years’ time would help diminish rupee volatility, too, the report adds, besides making the sector robust enough to withstand supply shocks.

India reached $340 billion in 2023 through services exports, which refers to exporting a range of activities including telecommunication, transportation, financial and insurance services, computer and information services, business and professional services, among others. Last month, Commerce and Industry Minister Piyush Goyal asserted that India’s goods and services exports for fiscal year 2023-’24 would be as strong as that of the previous fiscal despite world trade currently witnessing a slump amidst uncertainties. The foreign trade policy of India that was announced in 2023 has targeted $1 trillion of service exports by 2030.

The Goldman Sachs report outlines: “Our baseline scenario suggests that services exports could reach around 11 per cent of GDP by 2030 (versus 9.7 per cent of GDP in 2023), which amounts to around $800 billion (compared to around $340 billion in 2023).” The report adds that a current account deficit in GDP of around 1.1 per cent could be possible, assuming there are “no significant moves in commodity prices and goods trade balance beyond 2024”.

Explaining how India’s share in global services exports has increased by more than two times in 18 years aided by GCCs, the report observes: “Revenues of GCCs in India have grown nearly 4x at a CAGR of 11.4 per cent over last 13 years to $46 billion as of FY23. The number of GCCs has more than doubled from 700 to 1,580 over the same time period, with the sector adding around 1.3 million employees (11.6 per cent CAGR), taking the total employee headcount to 1.7 million in FY23.”