India‚Äôs services sector has matured considerably during the last few years and has been globally recognized for its high growth and development. This sector has been growing at an annual growth rate of about 28% during the last 5 years. Services exports amounted to a meager US$ 8.9 billion in 1997 but over the years services exports havegrown substantially. There has been rapid growth in the services exports from the year 2002. The exports have grown up from US $ 19.1 billion to US $ 73 billion in 2006 to US $ 96 billion in 2009 . Presently services sector account for more than 55%of India‚Äôs GDP.
India's service sector contributes more than 55 per cent of GDP, making it the most formidable component of the country's economy. An extrapolation of Reserve Bank data by India Brand Equity Foundation in fact shows that service exports could topple merchandise exports in the medium term. The Government of India is taking up most care to uplift this potential sector which contributes heavily in India‚Äôs Foreign exchange.
DECISION ABOUT CHOOSING ‚Äď
1)EXPORT MARKET visa-vis Local Market
2)Services Sector exportvisa-vis ‚Äď Merchandise export
First of all one should evaluate whether to go for export or concentrate in local market. If an Individual or a company is planning to explore themselves and encash opportunities in the International market. It should decide that in which direction and area to establish itself. Like it has to decide whether it should establish itself in the export of goods or services. Export of goods means physical exports of merchandise and all non-physical export comes under export of services. So, it is advisable that critical research may be done by the individual or the company whether to export goods or services.
Searching a buyer for your services or product is very critical job as no one is waiting for you to come and buy your products or services.Some major means adopted these days are for searching buyers through internet, participating in Trade Fairs abroad, participating in BSM‚Äôs, interacting regularly with Trade and Commerce organizations abroad or having membership of a council as they are the gateway of country‚Äôs trade. one should also enroll himself with some trade magazines which regularly publish trade and tender enquiries. Apart from that, the most effective means these days are hosting one‚Äôs profile and product/services on the Internet,
TIPS FOR EXPORTER AFTER SELECTING SERVICE SECTOR AS A FIELD OF EXPORTS
With the growing competition and technology change regularly now-a-days, there is a need of comprehensive strategy and follow-up for entering in exports market.The following are some of the measures for successful exporters:
In order to be successful in exporting one must research its markets. No one should ever try to tackle every market at once. Many enthusiastic persons bitten by the export bug fail because they bite off more than they can chew. Overseas strategy for services must be carefully considered.All services must be efficiently planned. They must be processed with due regard to the need of the export markets.
SELLING KNOWS HOW
One should concentrate on making‚Äėown brand‚Äô of their services , which is much demanded by buyers in overseas .
FAST DELIVERY OF SERVICES
Services must be delivered as per the time framed. Late executions of services are not always the exporter‚Äôs fault. But such difficulties can invariably be overcome, and anyone contemplating entering export for the first time must be determined to let nothing stand in the way of-fast and efficient execution of services . In most of the cases person rendering the service is himself responsible for timely delivery unlike physical export and hence this must be ensured.
Communication internal and external must be far-reaching and speedy. Good communication is vital in export of services.Failure to reply promptly to letters, using sea mail to answer airmail letters are everyday errors and speed and timely action is essence of export communication.
FOLLOW UPS AND FEED BACKS
Follow up and feed back should be well taken care in the service exports and with the growing competition, customer satisfaction should be given upmost priority. After execution of services also, the exporter should attain the feedback of the services he has rendered so that in case of any improvement is required in further orders can be attended.
Apart from all the above issues, an individual have to decide ‚Äď
¬∑ Style of operation whether as an individual or as an corporate entity
¬∑ Legal angle like IEC code, banking operations,etc
¬∑ Selection of logo, name and their registration, etc from the competent authorities.
¬∑ Taking membership of respective organizations like STPI in case of dealing in software exports
Facilities & Incentives to Service Exporters under Foreign Trade Policy
Eligibility & Entitlement
Indian Service Providers which are listed in Appendix 41 of HBP volume 1, who Have a total free foreign exchanges earning of at least Rs. 10 Lakhs in current financial year are entitled to Duty Credit Scrip equivalant to 10% of free foreign exchanges earned during current Financial Year.For Individual Service Providers, minimum would be Rs. 5 Lakhs.
Duty credit scrip may be used for import of any capital goods including Spares, office equipment and professional equipment, office furniture and Consumables; that are otherwise freely importable under ITC (HS), Imports Shall relate to any service sector business of applicant.
Utilization of Duty credit scrip earned shall be permitted for payment Of Duty in case of import of only those vehicles which are in the nature of professional equipment to the service provider.
In cases of hotels, clubs having residential facility of minimum 30 rooms, golf resorts and stand-alone restaurants having Catering facilities, Duty Credit scrip may also be used for import of consumables including food items and alcoholic beverages.
Entitlement / goods (imported/procured) shall be non transferable (except with in group company and managed hotels and be subject to actual User condition.
Procurement from Tourism Sector
Utilization of Duty Credit Scrip shall be permitted for payment of excise duty in terms of DoR notification issued for procurement from domestic sources, of itemspermitted for imports under SFIS Duty Credit Scrip.
At present, Hotels & Restaurants are required to submit a Chartered Accountant certificate that the entire duty benefits availed under the ‚ÄúServed from India‚ÄĚ‚ÄĚ Scheme have been passed on to the consumer. From now on, only the declaration will suffice.
Under EPCG scheme of the Foreign Trade Policy, Servioce providers can also import capital goods at concessional rate of duty @ 3%.
Applicant shall be categorized depending on his total foreign exchange earning during current plus previous three years upon exceeding limit below. For export house status, export performance is necessary in atleast two out of four years.
Export/performance (in crores)
Start Export House
Start Trading House
Premier Trading House
¬∑Export of services are entitled for double weight age on exports made for grant of status certificate.