The Union Budget 2026-27 introduced several measures to strengthen India’s services exports and improve global competitiveness. India’s services exports reached USD 348.4 billion during April–January FY2025-26 and accounted for around 10% of GDP in the first half of FY26. The government proposed tax incentives for cloud service providers, reforms in Safe Harbour rules for IT services, and faster Advance Pricing Agreements (APA). The budget also focuses on expanding Global Capability Centres (GCCs), strengthening digital infrastructure, promoting medical tourism, and increasing skill development in caregiving and traditional medicine sectors.
India’s services sector has become a major driver of economic growth and international trade. In recent years, India has emerged as one of the world’s leading exporters of digital and knowledge-based services.
During April–January FY2025-26, India’s services exports reached about USD 348.4 billion. In the first half of FY26, services exports accounted for around 10% of India’s GDP. The sector contributes nearly 30% of total employment, making it an important source of jobs.
Software services dominate India’s services exports. Other growing segments include business consulting, fintech services, business process management (BPM), and IT-enabled services.
India is also becoming a global hub for Global Capability Centres (GCCs). Over 1,700 GCCs employ more than 1.9 million professionals in the country.
Trade agreements with countries such as UK, EU, Australia, Oman, and New Zealand are expanding market access for Indian service providers.
These initiatives aim to strengthen India’s position as a global leader in services exports by 2047.
Services Trade in Economics
1.India’s services exports during April–January FY2025-26 were approximately:
A) USD 210 billion
B) USD 348.4 billion
C) USD 410 billion
D) USD 500 billion
Answer: B
2.Services exports contributed approximately what share of India’s GDP in H1 FY26?
A) 5%
B) 7%
C) 10%
D) 15%
Answer: C
3.Under Union Budget 2026-27, tax holidays for cloud service providers are proposed until:
A) 2035
B) 2040
C) 2047
D) 2050
Answer: C
4.The Safe Harbour threshold for IT services was increased to:
A) ₹500 crore
B) ₹1,000 crore
C) ₹2,000 crore
D) ₹5,000 crore
Answer: C
5.Global Capability Centres in India employ approximately:
A) 5 lakh professionals
B) 10 lakh professionals
C) 1.9 million professionals
D) 5 million professionals
Answer: C
Answer: Services sector
Answer: Centres established by multinational companies in India to provide global business and technology services.
Students often confuse services exports with overall exports.
Services exports include IT services, consulting, tourism, finance, not goods trade.
Examiners usually ask:
Services Exports
Union Budget 2026-27
Global Capability Centres
IT Services Sector
Safe Harbour Rules
Advance Pricing Agreement
Digital Economy
AI Skills
Trade Agreements
Care Economy