The two services combined are expected to account for 21% of India’s total services exports in the year to March, compared to around 15% in the first half of 2021-22 and 2020-21 when the pandemic hit, according to UPCE. In 2019-20 before the pandemic, travel and transportation services accounted for nearly 23% of $213 billion in services exports.

The SEPC shared its estimates with the Department of Commerce. He sought support for a faster recovery in the sector and helped achieve the ambitious target of $350 billion in services exports in FY23, a 37% growth from $254 billion. dollars last year.

Travel services include the inflow of tourists for medical, educational and tourism purposes. Transport services are mainly freight, including postal and courier services by air and sea.

Transportation services exports are expected to hit $44.1 billion in the current fiscal year, or 12.6% of total services exports, which would be higher than the fiscal year’s share of 9.84% pre-pandemic 2020. Travel exports are estimated at $29.9 billion, or 8.5% of total services exports. This would exceed the 4.12% share in 2020-21, but would still lag behind the 14% share seen in 2019-20.

Telecommunications, computers and IT services are expected to reach $156 billion in 2022-23, accounting for the largest share of total services exports at 44%.

However, the sector is yet to return to pre-pandemic levels, said Abhay Sinha, chief executive of UPCE.

“In this context, the role of export incentives for the sector, either through notification of SEIS (now suspended Services Exports from India Scheme) 2020-21 and 2021-22, or through other export incentive, would play a crucial role in achieving the overall goal in general and the sector goals in particular,” Sinha said.

The service export sector continues to seek government support and incentives in the foreign trade policy likely to be unveiled this year, Sinha said.

“The sector is pinning its hopes on the post-pandemic recovery of certain key sectors, including travel, hospitality and entertainment. Thus, the importance of continued incentives to the service industry to achieve targets cannot be overstated,” he said.

The Asian Development Bank. in its supplemental outlook released Thursday, said the services sector will do well in FY22 and beyond as the economy opens up and travel picks up. Meanwhile, he lowered India’s overall gross domestic product (GDP) forecast for this fiscal year to 7.2% from a previously estimated 7.5%.

The Ministry of Finance, in its monthly economic review, pointed out that credit support to the services sector in the second week of June increased mainly due to a sharp increase in credit growth to hotels and restaurants and shipping during the second week of June.

The services sector will be the driving force behind renewed growth in FY23, said Aditi Nayar, Chief Economist, ICRA. “Middle-to-high income households are likely to prioritize spending on contact-intensive services, which have been avoided during the pandemic, over consumer durables,” Nayar said.

India’s services exports in FY22 had hit a record high of $254 billion, despite the travel and tourism, aviation and hospitality sectors badly hit by the pandemic.

Exporters will also focus on market research, consulting, engineering and construction services, which together will contribute to the $350 billion target for FY23, Sinha said.

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