India’s Software Services Exports Up 4% in FY21

The Reserve Bank has released data for the 2020-21 cycle of its annual survey of software and computer services exports. The survey collects details on India’s exports of software services {computer and information technology-based services (ITES) / business process outsourcing (BPO) services} by type of activity, nature on-site / off-site services, country of destination and four modes of delivery. For the 2020-2021 cycle of the survey, 6115 software exporting companies were contacted, of which 1,815 companies responded, most of which were large companies.

India’s exports of software services (excluding exports through commercial presence) are estimated at US $ 133.7 billion in 2020-21, registering a growth of 4% from the previous year. IT services and ITES contributed 65.3% and 34.7% respectively of total software services exports.

BPO services were the dominant component of IT services exports. More than half of software services exports were made by limited liability companies. The United States was the main destination for software exports, with 54.8%; Europe held 30.1%, of which almost half in the United Kingdom.

The US dollar was the main invoicing currency for software exports with a share of 72%; The euro and the pound together accounted for an additional 15.9%.
The share of off-site mode of software services exports has gradually increased to 87.1% in 2020-2021, from 80.1% five years ago.

The share of mode 1 (cross-border supply) in India’s software services exports increased further to reach 78.4% in 2020-21: this share of mode 1 increased over the years from 38.8% in 2002 -03 to 64.6% in 2009-10 then to 75.1% in 2019-20, to the detriment of the other three delivery methods {namely, mode-2 (consumption abroad); mode-3 (commercial presence); and mode-4 (presence of natural persons)}.

Foreign affiliates’ software exports through commercial presence, where the United States is a major destination, amounted to US $ 14.6 billion in 2020-2021. Total exports of software services, including services provided by foreign affiliates of Indian companies, grew 2.1% in 2020-21 and amounted to $ 148.3 billion.

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(This story was not edited by Business Standard staff and is auto-generated from a syndicated feed.)

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