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October, 2010

The services sector has been at the forefront of the rapid growth of the Indian economy.

As per the Central Statistical Organisation (CSO), Ministry of Statistics and Programme Implementation:

  • Trade, hotels, transport and communication grew 12.2 per cent in April-June 2010 over the corresponding quarter from a year earlier
  • Similarly, financing, insurance, real estate and business services grew at 8 per cent in the first-quarter of 2010-11
  • Community, social & personal services grew by 6.7 per cent during April-June 2010-11


Lead indicators suggest that the pace of expansion in the services sector activity is likely to be sustained.

  • Foreign tourist arrivals (FTAs) during January to September 2010 were 3.84 million, an increase of 10 per cent, over 3.49 million over the corresponding period in 2009, as per the Ministry of Tourism data.
  • According to the Telecom Regulatory Authority of India (TRAI), the number of telephone subscribers in the country reached 706.37 million as on August 31, 2010, an increase of 2.61 per cent from 688.38 million in July 2010. With this the overall tele-density (telephones per 100 people), touched 59.63.
  • According to the Indian Ports Association data major ports in India handled 271.29 million tonnes (MT) traffic during April-September 2010-11, as compared to 267.98 MT handled during the same period last year, registering a growth of 1.23 per cent
  • According to the Central Statistical Organisation, the key indicators of railways, namely, the net tonne kilometres and passenger kilometres have shown growth rates of 4.7 per cent and 5.6 per cent, respectively in the first-quarter of 2010-11
  • Production of commercial vehicles has registered a growth rate of 57 per cent whereas cargo handled by civil aviation has grown by 25.6 per cent and passengers handled by civil aviation has grown by 19.1 per cent in the first-quarter of 2010-11


According to World Trade Organisation's (WTO) "International Trade Statistics 2009" released in March 2010, India ranks twelfth in commercial service exports.

According to the Economic Survey 2009-10, the services sector grew by 8.7 per cent in 2009-10. The services exports reached US$ 102 billion in 2008-09 registering a growth of 12.5 per cent over 2007-08. The miscellaneous services category share has increased by 16.1 percentage points to 76.4 per cent in 2008-09 as compared to 2000-01. While the share of software services increased by 6.5 percentage points to 45.5 per cent, the share of non-software services increased by 9.6 percentage points to 30.9 per cent in 2008-09.

According to the Department of Information Technology, the share of information technology enabled services (ITeS) and business process outsourcing (BPO) exports has expanded. The total ITeS-BPO exports is estimated to have risen from US$ 1.5 billion in 2001-02 to US$ 12.7 billion in 2008-09, a CAGR of about 39.2 per cent. BPO now accounts for about 27 per cent of total exports.


According to data released by the Department of Industrial Policy and Promotion, the services sector (financial and non-financial) attracted foreign direct investments (FDI) worth US$ 1.26 billion between April and August 2010 while the cumulative FDI between April 2000 and August 2010 has been US$ 24.86 billion, accounting for 21 per cent of the total FDI inflow.

Some of the investments in the service sector include:

  • Denmark-based ISS, a facility services provider, has acquired a 49 per cent stake in Chennai-based security firm SDB CISCO.
  • Travel, transport and logistics major IBS Software has entered into a five-year deal with TUI Group Airlines to provide support services.