India’s services exports have experienced a significant increase over the past 18 years, thanks in part to the rise of global capability centers (GCCs). These centers have not only contributed to economic growth by boosting real estate but have also expanded services exports and created jobs. GCCs are offshore entities set up by companies worldwide, providing support for various business processes such as IT, human resources, finance, and analytics.
According to a report by Goldman Sachs titled “India’s rise as the emerging services factory of the world,” revenues from GCCs in India grew nearly four times at a compound annual growth rate (CAGR) of 11.4% between 2009 and FY23. The number of GCCs has more than doubled from 700 to 1,580 during this time period, with the sector adding approximately one million employees at an impressive CAGR of 11.6%. This has led to a total employee headcount of around one million in FY23.
Furthermore, India’s services exports grew significantly since 2005, reaching nearly $340 billion in FY23 at a CAGR of around 11%. This growth surpassed that of goods exports and propelled India’s share in global services exports from under two percent in 2005 to almost five percent in FY23. Meanwhile, its share in goods exports rose from just one percent to two percent during the same time frame.
Within the services sector, computer services remain the dominant sub-sector account for about half of India’s services exports in FY23. However, professional consulting was identified as the fastest-growing sector according to the report. The strong growth predicted for high-value services will drive top-end discretionary consumption and demand for commercial and residential real estate.