Services exports may reach over $240 billion in 2021-22, need govt support: SEPC

Representative image of hotel lobby.

Seeking incentives from the government, SEPC on Tuesday said the country’s services exports are expected to reach over USD 240 billion during 2021-22 on account of healthy performance by segments such as professional and management consulting services, audio visual, freight transport services, and telecommunications.

Services Export Promotion Council (SEPC) Chairman Maneck Davar said that during the first five months of the current fiscal year, exports from the sector increased 14 per cent to USD 95 billion.

"Total services exports for 2021-22 are expected to touch over USD 240 billion dollars and may increase even further when the tourism sector is opened up later in the year," Davar said.

In 2020-21, services exports dipped by three per cent to USD 206 billion. He added that the recovery of the service sector is largely based on the performance of sectors such as professional and management consulting services, audio visual and related services, freight transport services, telecommunications, computer and information services.

He also said the target of USD 1 trillion services exports by 2030 set by the government is feasible but there is a need to look at sectors other than IT and ITeS for growth.

The need of the hour is to provide a level-playing field with manufacturing and incentives to tide over the pandemic, he added.

"Unless the government focuses on the sector in the forthcoming Foreign Trade Policy (FTP) by announcing scheme-based export incentives and provides interim relief by continuing with the existing schemes in the short run, the sector will lose the momentum it has gained in the first five months of 2021-22," Davar said.

He added that services exports to an extent grow in line with merchandise exports as many services work as a facilitator for goods exports, such as transport and logistics services, distribution services, banking and insurance services, and aviation.