Even though India’s exports have been steadily declining, service exports have registered a boom. According to the latest RBI data, service exports stood at $ 17.70 billion in October, registering a growth of 5.25%. In September, the exports stood at $ 17.54 billion. According to the report, service imports stood at $ 10.86 billion in October. It was $ 11.10 billion in September.
The service sector has a major contribution to India’s economy. Its contribution to GDP is around 55%. India is also a major exporter in the service sector globally.
On the other hand, the country’s exports declined for the fourth consecutive month. Exports declined by 0.34% in November and stood at about $ 26 billion. For the past six months, the decline in imports has also continued. Imports declined by nearly 11% in November and totalled $ 38 billion.
In the month of November in 2018, imports stood at $ 43.66 billion. However, the trade deficit has come down. It was $ 17.58 billion in November 2018, which dropped to $ 12.12 billion this year. Crude oil imports fell 18% to $ 11 billion. Imports of non-petroleum products fell 10% to $ 27 billion.
On 29 November, the GDP figures for the second quarter of the current financial year, that is July-September, were out. India was found to have grown at a modest 4.5% in the second quarter of the fiscal. It was estimated that the GDP rate in this quarter would be between 4.3% and 4.7%, less than the psychologically better 5% in the first quarter.
The country’s largest public-sector bank State Bank of India (SBI) attributed the sluggishness of growth to the lack of reforms by the States. In its report, the bank said the States “have to transform by undertaking various structural reforms and learn from each other. Since there are wide differences in the Indian States, the contribution of each in the government’s goal will be different”.
The SBI strongly recommended that States should maintain policy continuity and “such should be political regime agnostic, as there have been regime changes in some of these States”. For example, the public sector bank explains, “rather than going for short-term measures like farm loan waivers, which lead to moral hazard problem, impacting the credit culture, measures should be taken to improve the agricultural productivity as in many States agriculture is the mainstay”.