10.4 ndian onom
Reforms for ease of doing business that 2016-17, in 2015-16 it registered negative
resulted in improving India’s ranking by growth of (–)2.4 per cent. Though, it
30 position. returned to positive territory with 5.7 per
The scale of reforms can be gauged from cent growth rate in 2016-17.
the fact that during this period, 25 sectors also Services exports recorded a robust growth
including services activities and covering 100 of 16.2 per cent during April-September
areas of FDI policy have undergone reforms. FDI 2017-18, with a turnaround in some
policy provisions were radically overhauled across major sectors like travel and software
sectors such as—construction development, services. With significant rise in foreign
broadcasting, retail trading, air transport, tourist arrivals, travel receipts, witnessed a
insurance and pension. robust growth of 27.7 per cent in the first
At present, more than 90 per cent of FDI half 2017-18 as compared to a growth of
successful implementation of the e-filing and 7.6 per cent in the corresponding period
online processing of FDI applications by the of the previous year. Notwithstanding the
Foreign Investment Promotion Board (FIPB), pricing pressure on traditional services and
the Government announced to phase out the a challenging global business environment
FIPB in the Union Budget 2017-18. Recently, facing domestic software companies,
on 10th January 2018, Union Cabinet approved
software services exports increased by 2.3
amendments in FDI policy allowing 100 per
per cent, a mild improvement over the
cent FDI under automatic route for Single Brand
previous period.
Retail Trading. Foreign airlines also have been
allowed to invest up to 49 per cent in Air India. Lower growth in services exports than in
imports led to a decline in net services
services trADe receipts in 2015- 16 and 2016-17. Net
services receipts rose by 14.6 per cent
After a downturn, services trade of India has come
in the positive territory during 2016-17. The latest during April-September of 2017-18. Net
situation (as per the latest Economic Survey 2017-18) surplus in services financed about 49 per
of India’s services trade is given below: cent of India’s merchandise deficit in
2017-18 H1 and cushioned the current
India remained the 8th largest exporter of
commercial services in the world in 2016 account deficit.
(WTO, 2017) with a share of 3.4 per To boost services exports, the Government
cent, which is double the share of India’s in its mid-term Review of Foreign Trade Policy
merchandise exports in the world at 1.7 2015-2020 increased incentives under Services
percent. Exports from India Scheme (SEIS) by 2 per cent,
The ratio of services exports to merchandise leading to an additional annual incentive of Rs.
exports increased from 35.8 per cent 1,140 crore which could help services exports
in 2000-01 to 58.2 per cent in 2016- including Hotel and Restaurant, Hospital,
17 indicating the growing importance Educational Services, etc. Although world trade
of the services sector in India’s exports. volume of goods and services is projected to
While, India’s services exports registered accelerate in 2018, enhanced global uncertainty,
a compound annual growth rate (CAGR) protectionism and stricter migration rules would be
of 8.3 per cent during 2006-07 to key factors in shaping India’s services exports.