indian software exports: Exports of Indian software services increased to 88.8% in FY22: RBI

The share of offsite mode of exports of software services by Indian IT service companies increased to 88.8% in fiscal 2021-22 as compared with 82.8% five years ago, according to data from the Reserve Bank of India released on Thursday.

This implies an increase in the share of services offered and work done for global IT services clients from India. India’s exports of software services (excluding exports through commercial presence) are estimated to have increased by 17.2% to US$ 156.7 billion during the fiscal.

The RBI survey collects data on various aspects of computer services exports as well as exports of information technology enabled services (ITES) and business process outsourcing (BPO). For 2021-22 round of the survey, 6,218 software export companies were contacted, of which 2,074 companies, including most of the large companies, responded. The responding companies accounted for 89.4% of the total software services exports during the year.

Computer services accounted for over two-thirds of total software services exports. BPO services accounted for nearly 84% of exports of information technology (IT) enabled services. Private limited companies accounted for 60% of the total exports of software services whereas exports by public limited companies declined during the year.
Total exports of software services, including services delivered by foreign affiliates of Indian companies, increased by 15.9% during 2021-22 and stood at US$ 171.9 billion; local software business by foreign affiliates stood at US$ 15.2 billion, with the United States being the major destination. The share of the US in software business from foreign affiliates accounted for 42.5% of the total business followed by the UK at 23.5%.

The United States and Canada were the top destination for software exports with 55.5% share, followed by Europe, of which nearly half was attributed to the United Kingdom, found the report. In terms of modes of supplying services, the share of Mode-1 (cross-border supply or offshoring) in India’s exports of software services increased further to 80.9% in 2021-22; the share of other three modes of delivery ( consumption abroad, commercial presence and presence of natural persons) declined.

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