New Delhi: India`s services exports including IT software fell, like the merchandise trade, in the first six months of 2009 under the impact of the global downturn, though the decline was not as steep as in goods, a study has shown.
The services exports entered the negative zone from the beginning of 2009 and declined year-on-year by about seven and three percent in the first two quarters of the calendar year, a study by the Federation of Indian Chambers of Commerce and Industry (FICCI) has revealed.
These clearly felt the pinch of the recession in the developed economies, the main destination of the services.
"Both total and all the major segments of services exports, except insurance and financial services, witnessed contraction since January," the study said.
Software services, which account for more than 46 percent of the country`s total services exports, declined by 14 percent in the January-June 2009 period.
"However, the scenario is expected to be reversed by the fourth quarter when services exports are likely to post positive growth," FICCI President Harsh Pati Singhania said.
Since the services started feeling the impact of the global recession from the last quarter of calender 2008, the overall performance last year remained subdued, though in positive territory.
The country`s merchandise exports suffered more severely suffering contraction of 17.6 percent and 30 percent in the two quarters under analysis.
The growth slowed down to less than six cent in the last quarter (October-December) of 2008, as against a robust 33.4 percent rise during similar period in 2007.
For the entire year of 2008, these exports showed an expansion of 12.4 percent as compared to 22 percent in 2007-08.
In terms of segment analysis for the first two quarters of 2009 (calendar), earnings from travel fell by 26 percent and 9 percent, signifying slowdown in tourist arrivals in the country since last November.
Among other major segments, communication and business and professional services, including management consultancy, architectural, engineering, technical and other business services registered negative growth ranging from 4 to 53 percent.