India is world’s services factory! Goldman Sachs forecasts $800 bn export by 2030 | Economy News

India is the world’s emerging services factory, according to a report by global investment bank Goldman Sachs. India’s share of global services exports doubled to 4.6 per cent in FY23 led by a rise in global capability centres, according to the report.

India is the world’s services factory, according to Goldman Sachs. (Photo credit: Reuters)

New Delhi: India’s contribution to the global services industry by way of exports has nearly doubled over the past 18 years to 4.6 per cent in 2023, according to a report by global investment bank Goldman Sachs. This figure stood at under 2 per cent in 2005. India has achieved this feat through the expansion of global capability centres (GCCs) in its territory, according to the report. Other gains from GCCs have been seen in the real estate sector as well as job creation.

Firms with GCCs in India became major exporters of services activity and witnessed a surge in revenues led by this development. The doubling of the GCC count in India to 1,580 in FY23 from 700 in FY10, has generated 4X revenues at $46 billion in 13 years and four-fold employment at 1.7 million over the same duration, according to data cited in the report.

What are global capability centres?

Offshore companies set up global capability centres across the world to provide an array of business support services such as:

• IT
• Human resources
• Finance
• Analytics

Bengaluru leads India in terms of concentration of GCCs with 30 per cent of the country’s total GCCs situation in the city and 34 per cent of all GCC workforce also working there.

How will India’s GCC sector perform going forward?

India’s GCC sector is expected to witness continued growth in high-value services. This is likely to spur discretionary spending in the top end of the income spectrum. This growth is also likely to drive up real estate demand in both the commercial and residential segment, according to the Goldman Sachs report.

Professional consulting services have outpaced other components of the services sector in 2023, even as computer services dominate India’s services exports, according to the report.

To be sure, India’s manufacturing exports have not matched pace with the country’s services exports, rising to 1.8 per cent in FY23 from 1 per cent in 2005.