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Dynamics of India’s Service Trade: A Constant Market Share Analysis

Vol 10 , Issue 2 , July - December 2023 | Pages: 1-25 | Research Paper  

 
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https://doi.org/10.17492/jpi.focus.v10i2.1022301


Author Details ( * ) denotes Corresponding author

1. * Soumasree Tewari, Assistant Adviser, Department of Economics and Policy Research, Reserve Bank of India, Mumbai, Maharashtra, India (soumasree116@gmail.com)
2. Rajeev Jain, Director, Department of Economic and Policy Research, Reserve Bank of India, Mumbai, Maharashtra, India (rajeevrbi72@gmail.com)

The paper attempts a constant market share analysis to decompose changes in India’s share in global services exports. Our analysis suggests that growth in services exports has been constrained by export market concentrations, lack of product augmentation, concentrated export basket and challenges from increased competition across sectors which do not augur well from the long run perspective. Further, a significant income elasticity both in the short and long run implies that there is a vast potential for India’s services sector to capture the global market with growing demand in certain segments. This is possible with a greater diversification of export basket to capitalise on business opportunities emerging in non-software sectors and build technical resonance and greater market diversification of software exports to further strengthen its global market share.

Keywords

Services Exports; Value Added; Market Share; Elasticity

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