A conducive regulatory environment will help India's services industry become more competitive and the government needs to support exports from the sector through incentives, tax and duty structures, says a report.
"A conducive regulatory environment and infrastructure could enhance India's global competitiveness in services, with increased productivity, quality employment, and increased trade and investment for inclusive growth," said the CII-KPMG report titled 'The Indian services sector: Poised for global Ascendancy'.
With the government increasing focus on services exports, coupled with a reviving economy and a policy-based push to the sector, India is expected to witness a significant jump in the same, translating into growth of the economy.
Highlighting importance of technology and infrastructure for trade and export promotion, the report said government further needs to focus on upgrading technology in the respective sectors, offer financial funding and support for sector development and provide guidance on new markets to enter.
"It is important for the government to also support growth in the existing and potential export markets through conducive policies, incentives and tax and duty structures."
The report released by Commerce and Industry Minister Nirmala Sitharaman at the Global Exhibition on Services (GES) at Greater Noida was presented to President Pranab Mukherjee at the function here.
The report said increased levels of foreign direct investment (FDI) and constant supply of cost-effective and technically skilled workforce can help ensure support of resources for the growth of services sector.
India has created a niche for worldwide exports in software and professional services, the focus now is expected to enhance exports in healthcare, education, banking, and finance sector, the report said.
The emphasis is also likely to be on diversification of export destinations to offer services to emerging markets, in addition to the traditional developed markets of the US and Europe, it added further.
"Policy initiatives, including trade reforms, and liberalisation of industrial and service sectors, may provide the required push to the sectors as well", said the report.
The report included key services sectors such as IT, telecom, tourism, media and entertainment, healthcare, management consulting, logistics and professional services.
According to the report, services sector contributed about 61 per cent to India's Gross Domestic Product in 2014-15 and grew at about 10 per cent per annum, making the country the second fastest growing services economy in the world.
"India's share in global services exports was 3.2 per cent in 2014-15, double that of its merchandise exports in global merchandise exports at 1.7 per cent, placing India in the eighth place currently amongst the top ten exporters of service in the world", it added.
"India's young demographic profile, combined with its rising literacy rate, offers it a significant competitive advantage vis-a-vis other developing economies," Rajat Wahi, Partner and Head, Consumer Markets, KPMG in India said.
Along with 'Make in India' initiative that is striving to boost the manufacturing sector, Prime Minister Narendra Modi has outlined a vision to represent India as a world-class services hub across sectors. Multiple stakeholders need to work cohesively to help achieve this vision,
Source :timesofindia.indiatimes.com
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