Dr. Alka Maurya, Director, SIIB, Pune
India's Services Trade: A Strategic Imperative for the Digital Era
Global trade is in the midst of a significant evolution. Previously dominated by goods-centric manufacturing and traditional supply chains, it is now increasingly shaped by services, cross-border digital flows, and platform-driven commercial ecosystems. For India, which possesses one of the world's strongest service sectors, a robust technology and innovation economy, and expanding digital inclusion, this shift presents critical strategic opportunities.
Rapid Expansion of Services Exports
India's services exports have demonstrated exceptional performance over the last decade. In fiscal year (FY) 2014-15, services exports were approximately USD 160.37 billion. By FY 2024-25, they had reached nearly USD 387.5 billion, marking a growth of about 141 percent. In comparison, merchandise exports rose from around USD 310.35 billion in FY 2014-15 to USD 437.4 billion in FY 2023-24, reflecting an increase of roughly 41 percent. With total export of 824.9 bn USD from India, contribution of services export is around 47.1%.
Also, out of total FDI inflow of USD 81.04 billion in 2024-25, share of services sector was 19%, followed by computer software and hardware - 16%, trading - 8%, whereas, share of manufacturing sector was 23%.
Moreover, at seventh position, India has a share of 4.3% in in global services exports whereas at about 16th position, India's share in global merchandise exports is 1.8%.
This data signals a clear transformation. Services are outpacing goods as the principal driver of India's external trade performance and foreign exchange earnings.
A Broadening Spectrum of Exportable Services
Information technology remains foundational to India's services economy. However, the country is rapidly diversifying into a range of sophisticated export offerings. Key growth areas include:
These segments draw on India's enduring competitive advantages: a large skilled workforce, thriving start-up culture, sector-specific expertise, and rapidly expanding public digital infrastructure.
Services-Focused Trade Policy and FTAs
India's earlier trade agreements were predominantly goods-centric, providing limited leverage for services exporters facing restrictions on mobility, licensing, data flows, and qualification recognition. The recent approach marks a shift toward services-driven integration.
Recent and ongoing agreements reflect this transition:
These agreements aim to unlock wider market access and reduce behind-the-border regulatory barriers that disproportionately affect services trade.
Enabling Reforms to Maximize Services' Potential
Domestic reforms must complement trade negotiations to sustain high-value services export growth. Priority areas include:
Strategic Outlook
India's services trade is transitioning from a supportive role to the primary engine of global economic engagement. With services exports growing at more than triple the pace of goods exports over the last decade, India is redefining its trade competitiveness. Accelerating progress now depends on services-first trade agreements, innovation-driven industries, and domestic capability building aligned to global digital-services markets.
For policymakers, business leaders, and academic institutions, this inflection point offers a compelling mandate. Nurturing globally deployable talent, strengthening research in trade and digital economics, and deepening collaboration between government and industry will be essential to unlocking India's leadership in services-centric global trade. Success in this mission can transform India's economic trajectory, enabling not only accelerated export growth but also inclusive, innovation-led development.
