Services Export : the Saviour

 

 

Context :

Global slowdown: Govt to increase services exports  /   05 July 2022

Extract :

==========================================

 

India’s services exports rise to record high in FY22  / MINT  /  04 May 2022

 

Extract :

 

India’s services exports touched a record high in 2021-22 largely led by software

 services, and professional and management consulting services, even as

 contact sectors like travel, recreational services, and construction remained

 affected due to the pandemic.

 

India’s services exports touched:

 

#   2021-22 ……………. .$  254.5   billion

#   2020-21………………. $  206.09  billion  (up 23.4% )

#   2019-20………………. $  213   billion

 

Services exports hit an all-time monthly high of $ 26.9 billion in March 2022

 

Telecommunications, computer, and information services, other business services and transport are the top contributors in services exports during April-December 2021

 

Commerce and industry minister Piyush Goyal had said last month that India’s

services sector has achieved the all-time high despite sectors like tourism,

aviation and hospitality severely affected due to the Covid-19 pandemic.

India is expecting to make significant gains in the services exports sector in view

 of the comprehensive trade deals signed with the UAE and Australia. It is also

 negotiating free trade comprehensive agreements with the European Union, the

 UK, Canada, and Israel.

 

MY  TAKE :

Ø  Leveraging our Engineering Talent …………………….13  Dec  2018

Extract :

But , if “ Manufacturing Sector “ and “ Service Sector “ were two horses in the

 GDP race , I would bet on the “ Service Sector “, especially from the following

 view-points :

        #  “ Capital Investment per Job created “ would be much lower ( may be 10

              % of  Mfg. Sector ? )

       #    Jobs created would be much higher  ( may be 5 times of  Mfg sector ? )

       #    Time ( to create those jobs ) would be much shorter ( months instead of

             years )

  #     Export of  “ Services “ are much easier than export of  “ Goods “

      #     Quality of our “ Services “ are comparable – or even better – than from

             other countries

      #     We will , soon , have the desired quality / quantity of Internet connectivity ,

             all over India

      #    We are turning out thousands of Graduates  each year though some need “

            Skilling “

      #    Salaries of our Engineers are 20 - 25 % of similar hires in USA – EU – Japan

             – UK etc

 

 

Ø  Brain Inc 2.0 ………………………………………..21 Aug 2017

Extract :

Now consider this :

  

·         By employing 5 lakh engineers , India’s “ Tech R&D Firms “ earned $ 22 billion

          . That works to a billing of $ 44,000 per man-year of R&D ( Export of

          Services )

 

           I presume that the “ Manpower Cost “ constitute approx. 50 % of Billing Rate

           ( rest being OVERHEADS and MARGIN )

 

          

·         Hence , Indian R&D firms must be paying an average of $ 22,000 per year to

          its employees ( approx. Rs 1.2 lakh per month )

 

             { Refer :  Employee Expenses as %age of Sales   /   05   July   2022 }

 

 

 

·         As against this , both , Indian as well as American firms pay ( on an average )

         , $ 88,000 per year to H1 B  visa holders

 

          

      With this kind of “ Cost Advantage “ , is there a possibility to do better than

      the projected earnings of $ 40 billion in 2020 ?

 

           

   It is high time our Policy Makers launch a new initiative ( of Export of

   Intellectual  Property ) , called :

  

                     INDIA  :  the  BRAIN  FACTORY  of  THE  WORLD

 

 

During an Interview with Business Line ( 16 April 2016 ) , the then CEO of Infosys

 , Vishal Sikka , said :

“ We have to re-imagine the notion of services “

In support of my belief  in the potential re-imagination of this “ Service Sector “ ,

allow me to quote Peter Diamandis 

  {  https://www.diamandis.com/blog/topic/web-3-0  ]  :

 The Spatial Web is also giving way to “virtual company headquarters” and

 completely virtualized    companies, where employees can work from

 home or any place on the planet

 

·        Delocalize with VR, and you can now hire anyone with Internet access ( right

         next door or on the other  side of the planet )

                  

·        Web 3.0 is changing the way we work, where we work and who we work with.

 

  IT Outsourcing : a Silver lining ?.......................11  Nov  2020

 

Extract :

Dear Shri Ravishankar Prasadji,

Ø  Indian  IT BPM INDUSTRY in  FY 19  { Y-O-Y growth }

             #   Revenue…………………… 6.1 %  [  $ 177  billion  ]

             #   Exports…………………….  8.3 %  [  $  136 billion  ]

             #   Domestic Inflow……….  7.9  %  [  Rs 2.9 lakh-crore  ]

             #   Employees………………… 4.3  %  [  4.14  million  ]

  

Is there a way we can SALUTE them for this achievement ?

Yes

By letting them loose – giving them a free hand , as suggested in my earlier e-

mail :

  " BACK FACTORY " OF THE WORLD ?.........................[ 09  Sept  2015  ]

 

With regards,

Hemen Parekh  /  hcp@recruitGuru.com  /  15  July  2022

 

 

Related Readings :

June trade deficit widens to record  $  26.1 billion    /  Hindu  /   14  July  2022

Fears over India's external debt are overblown  /  MINT   /  12 July 2022

Five reasons why rupee can depreciate further, may fall below 80 per US dollar / MoneyControl / 14 July 2022