The per centage increase in service exports as per cent of GDP in India from 2016-17 to 2017-18 is 0.2 while percentage increase in 2017-18 to 2018-19 is 0.3. (Shown in below graph).
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Service Exports as percent of GDP
An increase in service exports to GDP ratio has a net positive impact on the BoP position.
Composition of service exports
- The composition of service exports has remained largely unchanged over the years.
- Software services constitute the bulk of it at around 40- 45 per cent, followed by business services at about 18-20 per cent, travel at 11-14 per cent and transportation at 9- 11 per cent.
Service imports as percent of GDP
- An increase in service imports to GDP ratio has a net negative impact on the BoP position.
- Over the years, service imports in relation to GDP have been steadily raising putting pressure on BoP to worsen.
- However, increase in service imports to GDP ratio is inevitable given a rising level of FDI and a gradual upscaling of the Make in India program.
Composition of service Imports
- Business services constitute about a third of service imports and the component of travel services has been steadily increasing reflecting the growing attractiveness of global destinations to the domestic tourists in the country.