The Ministry of Finance on Tuesday released its Monthly Economic Report for the month of July, 2023. The report encapsulates all that has economically transpired within the month of July for the economy of India.
Key Takeaways
- Service Exports from India grew 12% in July.
- Trade Surplus in Service Exports grew by 20.8% in July.
- New avenues for Indian exports with US-China decoupling.
The Finance Ministry mentioned in its report that the Service Exports from India have remained robust amidst global uncertainties and slowdown. It sheds light upon the data of India’s Service Exports in the month of July and compares it with Merchandise Exports.
According to the Ministry, the Service Exports from India grew 12% year-on-year, ie. when compared with July 2022, the Service Exports from India have grown around 12 per cent. The same growth for the month of June was recorded as merely 0.7 per cent.
The growth in Service Exports is exceptional given that the Merchandise Exports decreased by 15.9 per cent during the same period.
The relatively higher growth recorded in the Services Exports increased the service trade surplus by 20.8 per cent in the month of July, also leading to almost halving of the trade deficit of India.
The exceptional performance of the Services sector must be seen in light of weak global demand and protracted geopolitical tensions.
Service Exports from India and other factors
The net exports of Service Exports from India have remained positive for the fiscal year of 2023-24 so far.
However, the data used for reckoning the Service Exports was provided by the RBI, which remained provisional for the month of July, as was duly mentioned in the report. The actual trade surplus in the month of July could only be reckoned once the RBI releases an update for the same.
The trade surplus observed also helped boost India’s foreign exchange reserve which hit the USD 603.9 billion mark by July end.
Going forward, the report mentions that the China-US decoupling could provide new avenues for Indian exports despite the projected weak global demand during 2023.
