The Survey said that the role of services exports as a Critical buffer strengthened further in the first half of FY26, with the its share in GDP rising to 10%, from 9.7% in the year ago period.
The average growth in services exports has more than doubled from 7.6% in the pre-pandemic period (FY16 to FY20) to 14% during FY23 to FY25, which the report termed as reflective of a strong and broad-based global demand for Indian services.
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Growth of services export moderated to 8% during FY26 (April-November). However, growth has remained above pre-pandemic levels despite this moderation, which the report attributed to an underlying momentum in services exports.
Software services accounted for over 40% of total services exports as the primary growth driver, expanding at an average rate of 13.5% during FY23 to FY25 compared to 4.7% in FY16 to FY20, supported by a strong global demand for digital services.
Professional and management consulting services emerged as the second-largest contributor, driven by a more than doubled growth rate of 25.9%, resulting in an increase in their share from 10.5% in FY16 to FY20 to 18.3% in FY23 to FY25. Together, these segments account for over 65% of services exports, which the Survey attributed to India’s growing specialisation in cross-border, knowledge-intensive activities.
It noted that Sustaining services export growth will depend on continued diversification within services and further movement up the value chain.
As India’s services exports expand and move up the value chain, the Survey described trade policy as central to facilitating cross-border delivery and reducing regulatory frictions.
It highlighted that India has increasingly leveraged free trade agreements, comprehensive economic partnerships, and bilateral engagements to enhance market access and competitiveness, with a focus on professional mobility, regulatory cooperation, and digital trade.
Amid realignment of global trade relationships, ongoing and completed agreements aim to further ease barriers and support services exports, including the FTAs which are yet to come into force, with the UK, Oman, New Zealand, and the European Union.
Beyond direct cross-border delivery, services are increasingly integrated into manufacturing through activities such as design, R&D, logistics, software development, and professional services, which the report termed as reflective of the growing “servicification” of production systems.
It referred to products like smart devices, whose value is driven by software ecosystems; medical equipment/wearables bundled with diagnostic and remote-monitoring services; and automobiles, which are increasingly described as “software on wheels”.
As manufacturing becomes increasingly technology and data-intensive, services such as ICT, finance, compliance, and after-sales support account for a growing share of value creation. The survey added that International experience suggests that this integration is a crucial channel for enhancing value addition, export competitiveness, and employment.
