India’s Rise as a Services Export Hub – Analyzed

India is quickly becoming a major player in the world of services, like China was with making things. Its service exports are growing much faster than its goods exports. Experts say this is thanks to changes in the country, and because India has a lot of young people. The National Stock Exchange (NSE) believes these changes and the country’s population are helping India’s economy grow.

Key Points

• India’s service exports are growing fast – 14.8% yearly.
• Goods exports are growing at a slower pace – 9.8% yearly.
• India is now the 7th largest services exporter globally.
• Global Capability Centres (GCCs) are booming in India.
• The GCC market is expected to grow significantly by 2030.
• India aims to become the world’s third-largest economy.

India’s service exports have grown a lot over the last 30 years, growing by an average of 14.8% each year. This is much faster than the growth of its goods exports, which have grown at 9.8%. Right now, India accounts for about 4.3% of all services sold around the world. The biggest parts of this growth come from things like telecom (mobile phones and internet), information technology (computers and software), and business services.

A key reason for this growth is the rise of “Global Capability Centres” or GCCs. These are offices where companies send experts to help them with things like customer service, technology, and data analysis. The number of GCCs in India has increased dramatically – from 1,430 in 2019 to 1,700 in 2024, and is expected to reach 2,200 by 2030. These offices employ over 26 million people. The market for these GCCs is also growing, from $40 billion in 2019 to a projected $100 billion by 2030.

Several changes in India have helped make this growth possible. The Goods and Services Tax (GST), a new tax system, the Insolvency and Bankruptcy Code, and changes to real estate rules have all made it easier to do business. Also, the government has reduced taxes on companies and made it easier for companies to invest. Things like the UPI (a way to easily send money) being used around the world have also helped.

Beyond business changes, India has also made big improvements in areas like healthcare and social programs. Over 100 million people now have access to cooking gas (LPG) through the Ujjwala Yojana, more than 120 million toilets have been built as part of the Swachh Bharat Mission, and over 130 million people have bank accounts through the Jan Dhan Yojana. These efforts have improved many people’s lives.

Looking ahead, experts predict that India will become a $5 trillion economy in the next few years, thanks to its growing services industry, a young population, and more people investing money. India is expected to grow at an average of 6.3% to 6.8% per year, with its overall economy growing by around 12%. At this rate, India could become the world’s third-largest economy by 2027, passing Japan and Germany.

To keep growing, India is focusing on several key things: encouraging more private businesses to invest, helping small and medium-sized businesses (MSMEs), reducing the gap between education and jobs, and promoting environmentally friendly ways to finance businesses and grow the agriculture sector.

India’s economic transformation is a testament to strategic reforms and a growing workforce.