Trade Analytics

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August, 2011


An integral part of India’s structural reform program and liberalisation, the services sector is one of the fastest growing sectors in the country. Service sector or ‘tertiary’ sector accounts for about 57 per cent of India’s gross domestic product (GDP) and forms the backbone for social and economic development.

The sector entails industries like banking & financial services, education, healthcare, information technology (IT), telecom, media & entertainment, management, security, transportation and many more.

The HSBC Markit Business Activity Index—which measures service sector activity—rose to 58.2 in July 2011 from 56.1 in June 2011, supported by confidence among service providers regarding future business prospects.

Indicators/ Industry Dynamics

The lead indicators, discussed as following, suggest that the progress made by the service sector in India is here to stay.

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

  • Trade, hotels, transport and communication grew 12.8 per cent in first quarter (April-June) of 2011-12 over the corresponding quarter of 2010-11.
  • Similarly, financing, insurance, real estate and business services grew at 9.1 per cent in the first quarter of 2011-12.
  • Community, social & personal services is estimated at 5.6 per cent for the reported period.


  • Number of foreign tourist arrivals (FTAs) grew 10.8 per cent at 3.42 million for the period January-July 2011 over the corresponding period in 2010. There has been a growth of 10.1 per cent in FTAs in July 2011 (0.49 million) over July 2010 (0.45 million).
  • There was an addition of 11.3 million telecom subscribers in the month of June 2011, increasing the total telecom subscriber base by 1.29 per cent to 885.99 million, stated Telecom Regulatory Authority of India (TRAI) in its report.
  • Cargo handled at major ports registered growth rate of 5.2 per cent while cargo handled by the civil aviation grew by 4.9 per cent for the first quarter of FY12.
  • The key indicators of railways, namely, the net tonne kilometres and passenger kilometers grew by 6.3 per cent and 6.1 per cent, respectively in the first quarter of 2011-12.
  • The key indicators of banking, namely, aggregate bank deposits and bank credits have expanded by 18.7 per cent and 21 per cent, respectively during the first quarter of 2011-12 over the first quarter of 2010-11.


India emerged as the 10th biggest exporter of services worldwide for the year 2010, up from 12th position in 2009, according to recently released World Trade Report 2011. In terms of value in 2010, India exported services worth US$ 110 billion.

India's service exports stood at US$ 34.34 billion for April-June 2011. The service exports receipts for the month of June 2011 were US$ 11.04 billion.