A report by Goldman Sachs, titled ‘India’s rise as the emerging services factory of the world’, has highlighted that India’s share in global services exports has more than doubled in the last 18 years.
The rise of global capability centres (GCCs) has played a crucial role in this expansion, according to the report. GCCs are offshore entities set up by companies that support a range of business processes, including IT, human resources, finance and analytics.
The increase in the number of GCCs has boosted services exports, added to economic growth, created jobs and led to a rapid increase in revenues for these firms.
Dominant sectors
Within services, computer services remain the dominant sub-sector, accounting for nearly half of India’s services exports in 2023. However, professional consulting exports have been the fastest growing sector.
Revenues of GCCs in India have grown nearly 4X at a CAGR of 11.4% over the last 13 years to $46 billion as of FY23. The number of GCCs has more than doubled from 700 to 1,580 over the same time period. GCCs have added around 1.3 million employees (11.6% CAGR), taking the total employee number to 1.7 million in FY23, says the report.
The report says that over the next few years, the strong growth in high-value services will continue. This will domestically drive top-end discretionary consumption and commercial and residential real estate demand, it adds.
The Goldman Sachs report says that India’s services exports grew to nearly $340 billion in 2023 at a CAGR of around 11% from 2005 (nearly double global growth) outpacing the growth of goods exports. India’s share in global services exports rose from under 2% in 2005 to 4.6% in 2023, while India’s share in goods exports only increased from 1% in 2005 to 1.8% in 2023, the report says.
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