Services exports down 3.3 per cent at $ 22.54 billion in April-May

MUMBAI: India's services exports declined marginally by 3.3 per cent to $ 22.54 billion in the first two months of this fiscal, according to RBI data released today.

The services exports during April-May 2011 were at $ 23.3 billion.

Demand slowdown from destinations like the US and Europe and depreciation in the value of rupee against the US dollar has resulted into lesser exports earnings, said an analyst.

Export earnings were also affected as the information technology companies, which accounts for a major chunk in the services export, had to offer discounts to their clients due to rupee depreciation, said experts.

Software services companies, particularly into IT and IT-enabled services, have been asked by clients to share their profits because of rupee depreciation, said Director of Indian Institute of Foreign Trade K T Chacko.

"Some sharing has happened on that (rupee depreciation) which is one of the reasons for lesser earnings", Chacko said.

Meanwhile, fall in the value of rupee against the US dollar resulted in higher outgo for services imports which marginally rose to $ 14.22 billion during April-May from $ 13.97 billion a year ago.

The rupee has fallen by around 20 per cent against the US dollar from a year ago.

Depreciation in the value of rupee also resulted in lower realisation from services like hospitality, education, hotel and tourism, said Rajesh Sharma, Director General of Services Export Promotion Council (SEPC).

"Because of rupee depreciation, receipt from tourists, foreign students and tourists fell as they paid less dollars," said Sharma.

RBI data on India's international trade of services which is released on a monthly basis with a lag of 45 days, however is provisional and undergoes revision when the Balance of Payments data is released on a quarterly basis.

Software, business and financial services, communication services, travel, transportation, insurance are some of the major services that are exported.