Exports of services sector now need to change its target, equal to that of goods

- India needs to take advantage of the situation and focus on both areas

Former Reserve Bank of India Governor Raghuram Rajan's theory is that India should focus on exporting services and not try to copy China and become a manufacturing giant. India's services exports are now fast moving along with merchandise exports. In January this year, the exports of both were almost equal and more than 21 billion dollars.

If this assumption turns out to be true, it would lend credence to former Reserve Bank of India governor Raghuram Rajan's theory that India should focus on service exports and not try to copy China and become a manufacturing giant.

However, the question is whether this situation will continue even when the situation abroad becomes normal? Merchandise exports fell for the second consecutive month in January compared to the same period last year due to adverse external conditions, while services exports registered a sharp rise. Exports of goods have declined by 6.5 percent in January, while exports of services are estimated to increase by 49.05 percent.

Export of goods will be driven by commodity prices, which may fluctuate continuously. Services exports will be driven by other factors, such as demand for IT exports. It will depend on the border with the business cycle.

Economists suggest that India needs to focus on a service-based export strategy. China initially grew too fast and kept it under control by cutting spending and suppressing wages and consumption. As time went on, China also had a more educated workforce and better infrastructure. Fees have also been reduced. He argued that the initial part of China's strategy may initially be difficult and unclear for democratic India. India can see possibilities in services that can be provided remotely using technology.