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Commerce Minister asks industries to explore new markets for export of services

Updated: Nov 12, 2013 03:40:15pm
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New Delhi, Nov 12 (KNN) Acknowledging services as an essential ingredient to economic growth, the government today asked industries to explore new markets like Africa, apart from the North American market for increasing the country's export of services.

"Even for services sector we need to look at other major markets. We have a strong presence in North America. Regions like Africa have huge opportunities and there you can be more cost competitive," Union Commerce and Industry Minister, Anand Sharma said today at the Services Conclave organised here jointly by the CII and the Commerce and Industry Ministry.

Services in India contribute about 60 per cent to GDP, 35 per cent to employment, 25 per cent to total trade, 40 per cent to exports, 20 per cent to imports and account for over 50 per cent of foreign direct investment into the country. 

Sharma highlighted that the services trade is an essential ingredient to economic growth, sustainable development and contributes prominently to employment generation.
But, “in a global market of USD 4 trillion of services exports, India’s share is still low. It’s USD 227 billion.”

Sharma also said just as Indian merchandise exporters diversified their markets and tapped new economies, service exporters should also adopt the same strategy. 

Further, he added that there is a need to seriously look at how to achieve services sector growth which is connected with India’s economic philosophy of inclusion and sustainable development.

The Commerce Minister proposed the need to have a Services Competitiveness Council, on the lines of National Manufacturing Competitiveness Council.

“On the services side, whatever we call it, we accept this proposal which has been made by the industry. I think it is doable,” he said. He further added that “there is a need to look at each vertical of the services sector and focus on that, in a manner that we are able to address the challenges that exist.”       
   
Putting emphasis on the fact that 80 per cent of India’s total exports are dominated by the high skilled services including software business services, financial services and communication services, Sharma said “The growth in the service industry verticals has significantly enhanced the number of well-paid jobs and have enabled a reallocation of labour to high productivity sectors.”
 
Moreover, emphasizing that while exports from IT and ITES last year stood at Rs 1.40 lakh crore, registering a growth of over 70 per cent over the previous year, the success witnessed in the IT sector has not been accompanied by concomitant growth in other services industry verticals, the Minister said “There is a need to adopt a holistic approach to the entire services sector. The challenge is not just to increase the size of the services sector but also to diversify the services basket.”

On the US legislation on immigration reforms, he said there is a difference between immigration and movement of skilled professionals. India has raised its concerns over some elements of US immigration reforms. 

"The new regulations affect the movement of Indian professionals, affects visa costs...it will be counterproductive and it is not a healthy approach," he said. 

Indian companies support over 280,000 jobs in the US and have contributed over USD 15 billion to the US Treasury in the past five years. 

Sharma also urged the European Union to grant data-secure status to India, which is in talks with the group for a free-trade pact. Lack of this status has prevented the flow of sensitive information to India and affects its IT industry. 

On a demand of CII Services Council Chairman Malvinder Singh for setting up a task force on the sector and a services competitiveness council, Sharma said: "I think it is doable." 

In 2012-13, the export of services was valued at USD 146 billion, while imports were USD 81 billion. (KNN/SD)

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