International Workshop on Services Trade Statistics Durban, South Africa, June 15-16, 2009 Presentation By R K PATTNAIK, Adviser, Reserve Bank of India Mumbai, India Trade in Services Exports: The Indian Perspective
India s External Sector Developments Trade Account : Deficit about 8 per cent of GDP. Exports of goods: about 15 per cent of GDP Imports of goods about 23 per cent of GDP. Invisibles (services, transfers and income): surplus about 6.5 per cent of GDP. Services: about 60 per cent of invisibles receipts.
India s Trade in Services Invisibles receipts comprise (i) services, (ii) transfers and (iii) income. Trade in services mainly includes receipts towards, travels, transportation, and software services. Trade in services accounts for over 60 per cent of invisibles receipts and witnessed a steady growth over the years. Since mid 1990s, the software services have provided major support to the services receipts. In the recent years, these were about 3 per cent of GDP.
Data Source and Methodology Acceptance of obligations by India under the IMF's SDDS) Standard presentation and detailed presentation Requirement of disaggregated data on services as per the Inter-Agency Task Force s MSITS, Inclusion of services and the concomitant negotiations under the WTO jurisdiction, and Increasing interest of policy makers, researchers, trade negotiators, and Government Methodology Broadly in conformity with IMF BPM(5) and BPM(6) New reporting arrangement since 2004-05
Data Source and Methodology (Contd.) In the new arrangement a number of new purpose codes were introduced capturing services as recorded in BPM(6) Table 10.1 page 204 Also, in conformity with Manual on Statistics of International Trade in Services (MSITS) UNO, 2002 Also, broadly comply with the requirements under WTO in respect of General Agreement in Trade and Services (GATS) The data are reported by Authorised Dealers to Reserve Bank (ITRS) and sample based surveys
Data Source and Methodology (Contd.) Major Data Sources In accordance with the Foreign Exchange Management Act. 1999 FEMA (1999), all foreign exchange up to a threshold limit transactions must be channeled through the banking system. Banks dealing in forex transactions RBI. submit data to the Classification into various components is done with the help of purpose codes For small value transactions, a survey of unclassified receipts is conducted
Trends in India s Invisibles Account (in Terms of GDP) (Per cent to GDP) Year Receipts Payments Net 1990-91 1.4 1.1 0.3 1995-96 2.1 2.1 0.0 1999-00 3.5 2.60 0.9 2000-01 3.5 3.20 0.3 2001-02 3.6 2.90 0.7 2002-03 4.1 3.40 0.7 2003-04 4.5 2.80 1.7 2004-05 6.2 4.00 2.2 2005-06 7.1 4.30 2.9 2006-07 8.1 4.80 3.2 2007-08 7.7 4.50 3.2
Magnitude and Trends in Services Exports of India Year Exports (US $ billion) Share in World Exports (%) 2001 17.3 1.1 2002 19.5 1.2 2003 23.9 1.3 2004 38.3 1.7 2005 55.8 2.2 2006 75.4 2.6 2007 87.0 2.6
Composition of India's Service Exports Year Travel Transportation Insurance G.N.i.e. Software Services (Per cent) Non-Software Miscellaneous 1990-91 32.0 21.6 2.4 0.3-43.6 1995-96 36.9 27.4 2.4 0.2-33.1 2000-01 21.5 12.6 1.7 4.0 39.0 21.3 2001-02 18.3 12.6 1.7 3.0 44.1 20.3 2002-03 16.0 12.2 1.8 1.4 46.2 22.4 2003-04 18.7 11.9 1.6 0.9 47.6 19.2 2004-05 15.4 10.8 2.0 0.9 40.9 29.9 2005-06 13.6 11.0 1.8 0.5 40.9 32.1 2006-07 (R) 12.4 10.8 1.6 0.3 42.4 32.4 2007-08 (PR) 12.6 11.1 1.8 0.4 44.7 29.4
Software Services Exports of India Year IT Services Exports ITES-BPO Exports 1995-96 754-754 (US $ Million) Total Software Services Exports 1999-00 3,397 565 3,962 2000-01 5,411 930 6,341 2001-02 6,061 1,495 7,556 2002-03 7,100 2,500 9,600 2003-04 9,200 3,600 12,800 2004-05 13,100 4,600 17,700 2005-06 17,300 6,300 23,600 2006-07 22,900 8,400 31,300 2007-08 29,400 10,900 40,300
Computer and Information Services Export : Comparative Position (US $ billion) Sr. NO. Country 2000 2004 2006 2007 1 India 6.3 16.3 29.2 37.0 2 Ireland 7.5 18.8 21.0 26.1 3 U.K. 4.3 11.7 13.0 14.1 4 U.S.A. 5.6 6.7 10.3 12.7 5 Germany 3.8 8.1 9.7 12.2 6 Sweden 1.2 2.5 3.6 6.5 7 Israel 4.2 4.4 5.3 5.8 8 Spain 2.0 3.0 4.0 5.3 9 Canada 2.4 3.0 4.3 4.4 10 China 0.4 1.6 3.0 4.3
Brake-up of Non-Software Services
Comparative Position of India among Top Financial Provider, 2006
India s Services Exports: Major Strengths and Emerging Services Software Services - US $ 40.3 billion in 2007-08 Business and Professional Services - significant increase in recent years. Engineering Services- Huge Global spending estimated US $ 750 bn per year of which 10-15 are being off shored recently and expected to emerge very fast. India presently account for 12 per cent of total outsourcing in the world and estimated to account for 25 per cent (US $ 50 bn) by 2020. India has benefit of huge young and skilled population.
Invisibles Account Other important component of invisibles account is private transfers/remittances received from the Indian working overseas. With the large numbers of Indian working abroad, the remittances witnessed steady growth and provided a major cushion to the India s current account. Remittances accounted for 30 per cent of total Invisibles receipts in recent years.
Invisibles by Category
Invisibles Receipts by Category of Transactions
Invisibles Receipts by Category of Transactions (contd..
Invisibles Receipts by Category of Transactions (contd..
Invisibles Payments by Category of Transactions
Invisibles Payments by Category of Transactions (contd.)
Invisibles Payments by Category of Transactions (contd.)
Thank You