India's services exports are positioned to overtake merchandise exports within the next 18-24 months, provided current growth trends continue and policy bottlenecks are addressed in the upcoming Union Budget. This projection comes from the Services Export Promotion Council (SEPC), which highlights the sector's robust performance amid challenging global trade conditions.

Strong Growth Trajectory Drives Convergence

Services exports are demonstrating remarkable resilience with annual growth rates of 12-13%, significantly outpacing merchandise exports that face headwinds from tariff uncertainties and geopolitical developments. The current export figures reveal a narrowing gap between the two sectors:

SEPC Director General Abhay Sinha emphasized that services have already been offsetting a large portion of India's merchandise trade deficit. "At the current pace, services are very likely to surpass goods exports in absolute terms in the next one-and-a-half to two years," Sinha stated.

Structural Advantages of Services Exports

Unlike goods trade, services exports operate through four distinct delivery modes, making them structurally more resilient:

• Cross-border digital supply
• Consumption by foreign visitors in India
• Overseas commercial presence
• Temporary movement of professionals

This complexity, while making measurement more challenging, provides inherent stability. Despite contributing nearly 55% of India's gross value added, SEPC argues that services remain systematically under-prioritized in export policy frameworks.

Budget Proposal: DRESS Framework

Ahead of Budget 2026-27, SEPC is advocating for a services-specific duty remission framework called DRESS (Duty Remission on Export of Services), modeled after the RoDTEP scheme for goods exports. The proposal addresses a critical competitiveness issue where export-facing services carry a 4-9% tax wedge due to:

• Blocked GST input credits
• Fuel and electricity being outside GST
• Municipal levies and port charges
• Basic customs duty on specialized equipment

Priority Sectors and Fiscal Impact

SEPC has identified five high-employment, high-tax sectors for initial DRESS implementation:

The estimated fiscal requirement for these sectors is ₹45,000-50,000 crore in the first year. SEPC emphasizes this represents a refund of taxes already paid upstream rather than a subsidy, aimed at neutralizing domestic tax distortions that reduce global competitiveness.

Policy Implications

The potential overtaking of merchandise exports by services represents a significant shift in India's export composition. This transition reflects the economy's structural evolution toward services-led growth and highlights the need for policy frameworks that recognize and support this transformation. The success of the DRESS proposal could accelerate this timeline while enhancing India's position in global services markets.

SEPC Limited has officially announced securing a major purchase order worth ₹230.00 crore from MOIL Limited, a government undertaking, for a comprehensive turnkey project at the Chikla Mine in Maharashtra. The company disclosed this significant contract win through a regulatory filing under SEBI Regulation 30, highlighting the strategic importance of this infrastructure development project.

Order Value Breakdown

The total order value comprises two distinct components, with the domestic scope valued at ₹167.85 crore and an international component of USD 36.52 lakh for imported plant and machinery. SEPC Limited emerged as the lowest bidder through a competitive global tender process, demonstrating the company's cost-effective project execution capabilities.

Project Specifications

The contract encompasses the complete designing, construction, furnishing, and equipping of the 3rd vertical shaft at Chikla Mine on a turnkey basis. This comprehensive scope positions SEPC Limited as the single-point solution provider for this critical mining infrastructure development, demonstrating the company's integrated engineering capabilities.

Financial Performance Context

SEPC Limited has demonstrated steady operational performance with recent financial results showing consolidated total income of ₹455.00 crore in H1 FY26, alongside EBITDA of ₹54.00 crore and net profit of ₹24.85 crore. The company's annual performance for FY25 included revenue of ₹597.65 crore, EBITDA of ₹98.94 crore, and net profit of ₹24.84 crore.

Strategic Business Impact

This substantial order from MOIL Limited significantly strengthens SEPC Limited's position in the mining infrastructure sector, particularly in specialized vertical shaft construction. According to Managing Director Venkataramani Jaiganesh, the order reinforces SEPC's execution capabilities in the mining infrastructure segment and reflects continued trust from public sector clients. The turnkey nature of the project showcases the company's comprehensive engineering capabilities, covering the entire project lifecycle from initial design through final equipment installation and commissioning.