It mentioned that the country’s services exports were buoyed by software services, business and financial services and travel services in Q1 of 2023-24. Das, in his speech, said that the service exports remained strong during July and August 2023 driven by software and business services.
The slowing global economy, along with rising geopolitical tensions, has also hit India’s external demand. The report stated that merchandise exports and imports ($ terms) have been in contraction territory since February 2023. Services trade exhibited slowdown during April-August amid global headwinds.
The report also highlighted that the global Purchasing Managers’ Index (PMI) for manufacturing has continued to contract since September 2022, while the services PMI is moderating since May 2023, “albeit still in expansion mode”.
Domestically, the service sector gave an encouraging push to the country’s supply side. The report pointed out that the services sector GVA (gross value added) recorded a robust growth of 10% y-o-y in Q1 of 2023-24. This number has exceeded the pre-pandemic level by 14.1%.
“It was buoyed by sustained growth in contact-intensive services, financial services, real estate activities and revival in construction activity,” read the report.It also added that the services PMI strengthened to 60.6 in Q1 of 2023-24 and 61.1 in Q2 from 58.1 in Q4 of 2022-23, driven by demand and new business gains. A PMI reading of above 50 indicates expansion, and one below that indicates contraction.
