BPSC 71st CCE Prelims General Studies · Question 39 of 150

Correct — B, Ireland. India's own primary source settles the benchmark: the Economic Survey 2024-25 records in Chapter 3 that India's share in global services exports has more than doubled, reaching about 4.3 per cent in 2023 from 1.9 per cent in 2005. Ireland is above that line. On WTO-based trade statistics Ireland exported services worth USD 431.5 billion in 2023 — more than India managed even in 2024, when Indian services exports stood at USD 421.3 billion. A country of roughly five million people therefore out-exports one of 1.4 billion in services, and the reason is worth understanding rather than memorising. Ireland is the European domicile of choice for American technology and pharmaceutical groups, whose Irish subsidiaries book computer services, software licensing, contract research and business services as Irish exports. The giveaway sits in the same table: Ireland's services imports in 2023 were USD 418.6 billion, almost exactly equal to its exports, leaving a net services surplus of just USD 12.8 billion, because the receipts flow straight back out again as royalties and intellectual-property licence fees. India's position is the opposite in kind. Against exports of USD 421.3 billion in 2024, India imported only USD 204.4 billion of services, a net surplus of USD 216.9 billion — earnings that actually stay in the country and finance a large part of India's merchandise trade deficit. Ireland's gross number is bigger; India's net earnings are roughly seventeen times bigger. Russia and Indonesia are not close on either measure — about USD 42.2 billion and USD 39.0 billion of services exports respectively in 2024, each roughly a tenth of India's, and both running services deficits — so option (d) collapses. One caution: do not memorise a world rank for India. It is securely among the top ten services exporters, but the exact ordinal shifts between WTO and balance-of-payments vintages and from year to year. The question asks only for a comparison, and that comparison is stable.

• (a)Russia — Russia is a formidable exporter of goods — crude oil, natural gas, grain, fertiliser and metals — and candidates transfer that reputation to services. It does not survive the transfer. Russian services exports were about USD 42.2 billion in 2024 against services imports of USD 81.3 billion, a deficit of some USD 39.1 billion. That is roughly a tenth of India's services exports; Russia is a net buyer of services, not a seller.
• (c)Indonesia — Indonesia is South-East Asia's largest economy and the world's fourth most populous country, so it reads like a heavyweight. Its strength, however, is in coal, palm oil, nickel and processed metals, not in tradable services. Indonesian services exports were about USD 39.0 billion in 2024 against USD 57.5 billion of imports — a deficit of USD 18.5 billion and, like Russia, roughly a tenth of India's export figure.
• (d)More than one of the above — This requires at least two of Russia, Ireland and Indonesia to have out-exported India in services. Only Ireland does, and not narrowly: Ireland exported about USD 431.5 billion of services in 2023 against roughly USD 341 billion for India in 2023-24, some 26 per cent apart even allowing for the year the two figures are drawn from. Russia and Indonesia are each an order of magnitude below India and both import more services than they export. The composite fourth option is printed on dozens of questions in this paper and pays only when two items genuinely qualify.

Services exports are the sale of intangibles across a border — software development, business process work, consultancy, engineering and research, transport, travel and tourism, insurance, finance and telecommunications. In the balance of payments they sit in the current account under 'invisibles', alongside remittances and investment income, as distinct from the merchandise trade in the visible account. India's services strength is narrow but very deep. The Economic Survey 2024-25 reports that in telecommunications, computer and information services India supplies 10.2 per cent of world exports and is the world's second-largest exporter, and in other business services — the category that captures global capability centres, consultancy, engineering and research and development — it supplies 7.2 per cent and ranks third. Elsewhere India is ordinary: travel 2.1 per cent, transport 2.2 per cent, personal, cultural and recreational services 3.4 per cent, construction 3.5 per cent. Ireland's strength is narrower still and of a different nature: computer services and licensing revenues booked by the Irish arms of American multinationals, which inflate both sides of its services account simultaneously. The lesson generalises. Gross export value measures how much business is routed through a country; the export-minus-import balance measures how much the country actually earns.

Reason in three steps. First, fix the benchmark: India's share of world services exports in 2023 was about 4.3 per cent, on the Economic Survey's own figure — sizeable, but leaving room for perhaps half a dozen countries above it. Second, apply the size test to the two obvious economies. Russia and Indonesia are both large countries with large trade flows, but their exports are commodities and manufactures; both actually run services deficits, importing more transport, travel and business services than they sell. Neither is remotely near 4.3 per cent of world services exports. Third — and this is the single fact that discriminates — recognise that services exports do not track population or landmass at all. Ireland, with about five million people, exported USD 431.5 billion of services in 2023 because it is where American technology and pharmaceutical firms domicile their European operations and their intellectual property. Once you know that one fact, the answer is immediate; without it, Ireland looks like the least plausible option on the page, which is exactly why the examiner chose it. The trap is therefore (d): a candidate who correctly rejects Ireland's improbability and half-suspects Russia will reach for the composite option and lose a third of a mark. Note also what the question does not ask — it never asks for India's rank, and you should not supply one, because the ordinal moves between data vintages while the pairwise comparison does not.

• Economic Survey 2024-25, Chapter 3: India's share in global services exports has more than doubled, reaching around 4.3 per cent in 2023 from 1.9 per cent in 2005. India is among the world's top ten services exporters, but no single rank number is stable across WTO and balance-of-payments vintages.
• Ireland's services exports were USD 431.5 billion in 2023 against services imports of USD 418.6 billion — a net surplus of only USD 12.8 billion, because receipts booked by the Irish subsidiaries of American multinationals leave again as royalties and licence fees.
• India's services exports were USD 421.3 billion in 2024 against imports of USD 204.4 billion, a net services surplus of USD 216.9 billion — the single largest offset to India's merchandise trade deficit.
• Sector shares from the Economic Survey 2024-25: India supplies 10.2 per cent of world exports of telecommunications, computer and information services and is the second-largest exporter; 7.2 per cent of other business services, third-largest; and only 2.1 per cent of travel, 2.2 per cent of transport, 3.4 per cent of personal, cultural and recreational services and 3.5 per cent of construction services.
• The distractors are an order of magnitude away: Russia exported services worth about USD 42.2 billion in 2024 against USD 81.3 billion of imports, and Indonesia about USD 39.0 billion against USD 57.5 billion — deficits of USD 39.1 billion and USD 18.5 billion respectively. World services exports in 2024 totalled about USD 8.8 trillion.

• Assuming services exports scale with population or economic size — Ireland, with roughly five million people, out-exports India in gross services value while Russia and Indonesia, both far larger, run services deficits
• Reading gross export value as national earnings — Ireland's net services surplus in 2023 was USD 12.8 billion against India's USD 216.9 billion in 2024
• Quoting a hard world rank for India in services exports — the ordinal differs between WTO and balance-of-payments vintages and between years; state the share, about 4.3 per cent in 2023, and the pairwise comparison instead

BPSC asks this as a bare country comparison drawn from a single line of the current Economic Survey — pick the country above India, one mark, no reasoning shown — so the payoff is in having actually read Chapter 3 rather than a summary. UPSC handles the same quantity obliquely: in 2023 it planted a false figure for India's share of global goods exports inside a Statement-I and Statement-II pair, and in 2017 it asked whether India's share of world trade had risen at all after 1991. UPSC tests whether you know the direction and rough magnitude; BPSC tests whether you know the number.

• practice — not a real PYQ

  According to the Economic Survey 2024-25, in which category of services is India the world's second largest exporter ?

  • (a)Travel services
  • (b)Transport services
  • (c)Telecommunications, computer and information services
  • (d)Construction services

  Answer(c) Telecommunications, computer and information services — India supplies about 10.2 per cent of world exports in this category and is the second largest exporter. Its shares in travel (2.1 per cent), transport (2.2 per cent) and construction (3.5 per cent) are far smaller.

• practice — not a real PYQ

  In India's balance of payments, the net surplus on services trade is used mainly to offset which of the following ?

  • (a)The deficit on the capital and financial account
  • (b)The deficit on merchandise trade
  • (c)The outflow of foreign exchange reserves
  • (d)The interest burden on external commercial borrowings

  Answer(b) The deficit on merchandise trade — India persistently imports more goods than it exports, and the services surplus, together with remittances, is the principal item that narrows the resulting current account deficit.