Services Exports to Grow Slower to $420billion in FY26

 Chennai: Goods trade uncertainty will have a spill-over effect on services exports of FY26. Against a double-digit growth in FY25, services exports are expected to grow slower by 8.7 per cent in FY26 to $421 billion.

The services exports is expected to grow 8.7 per cent to around $421 billion in FY26 and services imports to grow by 7.4 per cent to around $213 billion. In FY25, the services exports grew sharply at 13.6 per cent to $387.5 billion, while imports grew by 11.4 per cent.

The net services exports is likely to stand around $210 billion in FY26. It would grow by 10 per cent in FY26, slowing down from 16 per cent in FY25.

The tariffs announced by the US, although on goods trade, have sparked another run of uncertainty, this time at an unprecedented scale. The spill-over effects of the same are expected to be felt on services trade as well with various investments and new orders being pushed down the road, finds India Ratings.

The World Trade Organisation expects the global services trade volume to grow by 4 per cent in 2025 down from a robust growth of 6.8 per cent in 2023 and 2024. The larger decline in services trade volume growth is expected to emanate from North America at 1.6 per cent in 2025 against 4.1 per cent in 2024. The North American region is a key trading partner for India’s services exports.

In FY25, the strong exports were led by ‘telecom, computer and information’ and other business services contributing over 40 per cent each to the growth. While the share of ‘telecom, computer and information’ services moderated to 47.3 per cent in FY25, that of other business services rose to a record high of 27.7 per cent. The rapid deployment of digital technologies by global firms has increased demand for Indian IT and ITES companies in areas such as cloud migration, cybersecurity and digital transformation consulting. The demand was strong across verticals such banking, healthcare, manufacturing and retail.