Which of the following countries had greater share than India in the global services export in 2023?

Question

UnlockIAS · Accepted Answer

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.

Why the other options are wrong — (a) 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 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) 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.

Concept: 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.

State PCS 2025 Q39 — Economy PYQ with Answer

State PCS 2025 Q39 — Economy PYQ with Answer