India’s services sector played a pivotal role in driving export growth in FY26, offsetting 64% of the country’s trade deficit, according to the Finance Ministry’s latest review. Strong performance in key segments such as IT services, business process outsourcing, financial services, and travel contributed to a robust rise in services exports during the year.
The steady expansion of services trade helped cushion the impact of a widening merchandise trade gap, which continued to face pressure from global demand fluctuations and elevated import bills. The resilience of the services sector provided critical support to the overall external balance, highlighting its growing importance in India’s export ecosystem.
Officials noted that India’s competitive advantage in skilled manpower and digital capabilities continues to fuel services export growth. The sector’s consistent surplus has emerged as a key stabilising factor for the economy, helping mitigate external vulnerabilities.
The Finance Ministry emphasized the need to further strengthen services exports through policy support, market diversification, and investment in digital infrastructure, ensuring sustained momentum in the coming fiscal years.
