Sunil Talati, chairman of the Services Export Promotion Council, said in an interview with Mint that India’s services exports have been affected since May, amid fears that hotels, travel and maritime industries and medical tourism will be severely affected if the Russia-Ukraine conflict continues. It is possible. However, services exports will meet the target of $250 billion in 2021-22 and reach $325 billion in the next fiscal. Edited excerpt:
Will the Russia-Ukraine crisis affect India’s service sector?
Its effect will be visible in the next two months – from May. Due to rising fuel prices and the ill effects of the war, there will be a severe impact on four or five sectors such as medical tourism, hotel industry, travel industry and maritime industry that provide services to importers and exporters. While the crisis should not have a direct impact on services exports, they do have an overall impact as (retail) petrol prices will be affected and could rise. 20 per litre. All exports and imports are getting affected due to various restrictions imposed by US and European countries. Therefore, merchandising exports will be severely affected and whenever merchandising exports are affected, the services sector that plays a role will be directly affected. Its impact is likely to be seen from June onwards and the contribution of services to GDP and services exports is likely to decline.
Do you expect any relaxation in the Foreign Trade Policy (FTP) for the service sector?
The Department of Commerce has tasked us with identifying areas that need support. So, we are currently working on sector-wise benefits for 12 champion sectors and will soon hand them over to the government, which can be covered in FTP including travel and tourism, education, legal, medical, accounting and finance. The government has asked us to send a report explaining why incentives should be given, how, methodology, scrutiny and balance of claims of incentives and a reasonable assurance given that within five years of giving incentives. Where will the exports reach within?
What level of service exports are you looking forward to this year and next?
This year the target of $250 billion will definitely be exceeded. We anticipate positive growth by March 2023, and based on the feedback I am getting from various sub-sectors of the service industry, it could touch $325 billion.
Do you see a skill gap?
The better the skill, the higher the export. But it has issues and challenges and we are working on them.
Never miss a story! Stay connected and informed with Mint.
download
Our App Now!!