Economic Survey 2018: India faces rising competition from China, Brazil in ICT

By: | Published: January 29, 2018 4:41 PM

Economic Survey 2018: The share of information and communication technology (ICT) in India's services exports "declined marginally" between 2006 and 2016, contrary to the trend in nations like China, Brazil, Russia and the Philippines, indicating rising competition for India from such countries, the Economic Survey said today.

Economic Survey 2018: Finance Minister Arun Jaitey will present the Union Budget 2018 on February 1.Economic Survey 2018: ICT share in China’s service exports grew from 22 per cent to 40 per cent in 2006-2016, while Brazil saw this contribution increase from 43 per cent to 55 per cent, during this period. (PTI)

Economic Survey 2018: The share of information and communication technology (ICT) in India’s services exports “declined marginally” between 2006 and 2016, contrary to the trend in nations like China, Brazil, Russia and the Philippines, indicating rising competition for India from such countries, the Economic Survey said today. The Economic Survey, tabled in Parliament, cited World Bank database as on January 19, 2018, to say that ICT accounted for 67 per cent of India’s services exports in 2016, compared with 68 per cent in 2006. “The share of ICT in total services exports for India declined marginally during the decade (2006-2016), while the ICT share in total services exports has increased in economies like China, Brazil, Russia, Philippines, Israel and Ukraine…,” it said. This indicated “increasing competition” for India from these countries, it added.

ICT share in China’s service exports grew from 22 per cent to 40 per cent in 2006-2016, while Brazil saw this contribution increase from 43 per cent to 55 per cent, during this period. Referring to RBI data, the Survey said “software exports registered a growth of (-)0.7 per cent in 2016-17”. However, during the first half of the financial year 2017-18, it grew by 2.3 per cent, the Survey said taking note of growth in “software returning to positive territory”. While the prospects for India’s overall service sector looks “bright” on the back of good performance of sub-sectors like tourism, aviation, and telecom, the “downward risk…lies in the external environment for software and business services”, it cautioned.

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The US, the UK and the European Union account for around 90 per cent of India’s total IT & IT enabled services exports. “While there are new challenges surfacing in these traditional geographies, demand from APAC (Asia Pacific), Latin America and Middle East Asia is growing and new opportunities are emerging for expanding in continental Europe, Japan, China and Africa,” it said.

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Offering a snapshot of the country’s IT-BPM sector, it said the industry employed nearly 3.9 million people in 2016-17, adding about 1.73 lakh people over 2015-16. The industry comprises over 16,000 firms that offer complete range of services, and over 4,750 start-ups, it added.

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