Trade Analytics
The share of service sector in India’s GDP is expected to reach 62 per cent by FY 2020.

Services Industry Analysis

Latest update: February, 2018

  • Till the global financial crisis of 2008, India’s services exports was registering a good growth for almost a decade.
  • Services export growth reduced to 11.9 per cent CAGR during 2005-06 to 2014-15 from 21.6 per cent CAGR during 1994-95 to 2004-05.
  • As a result of pick up in some sectors such as transportation and business services, services exports grew by 5.7 per cent in 2016-17.
  • In 2016-17, software services exports, which account for 45.2 per cent of total services, declined by 0.7 per cent due to a challenging global business environment and pricing pressure on traditional services.

Note: CAGR - Compound Annual Growth Rate
Source: Economic Survey 2016-17

  • The share of the services sector is 60.7 per cent of the FDI equity inflows during 2016-17.
  • In the periods 2014-15 and 2015-16, growth of the FDI equity inflows for the top 15 services were 67.3 and 64.3 per cent.
  • In 2016-17, growth rate of FDI inflows reduced to 8.7 per cent (US$ 43.5 billion) due to negative growth in trading, computer hardware and software, construction and hotels and tourism.
  • The Government has brought about a number of reforms such as the abolition of the Foreign Investment Promotion Board (FIPB) and the introduction of composite caps in the FDI policy which permits 100 per cent FDI under automatic route for any financial sector activity.

Note: FDI - Foreign Direct Investment
Source: Economic Survey 2016-17



Last Updated: February, 2018

Services sector is the biggest one in India and contributes more than half of Gross Value Added (GVA). As of 2016-17, 28.6 per cent of the Indian population was employed in this sector. The sector is a major contributor to the country’s FDI Inflows. In 2016-17, share of services sector in total FDI inflows was 60.7 per cent. FDI inflows to the sector during April 2000-December 2017 stood at US$ 64.097 billion. Nikkei India Services Purchasing Managers’ Index (PMI) increased to 51.7 in January 2018 from 48.5 in November 2017.

Services exports comprise a major part of the total exports of India. Net services exports from India stood at US$ 67.5 billion in 2016-17. Also, India is the export hub for software services. It has a 55 per cent share in the US$ 178 billion global sourcing market.

Sub-sectors that are performing well in FY18 are:

  • Aviation – India’s air passenger traffic doubled to 117.18 million in 2017 from 59.87 million in 2011.
  • Tourism – Foreign Exchange Earnings from tourism rose 20.8 per cent year-on-year to US$ 27.7 billion in 2017.
  • Information technology-business process management (IT-BPM) – Software exports are expected to grow 7-8 per cent and the domestic market is expected to expand by 10-11 per cent*.

The Government introduced ‘Services Exports from India Scheme’ (SIES) aimed at promoting export of services from India by providing duty scrip credit for eligible exports. Under this scheme, a reward of 3 to 5 per cent of net foreign exchange earned is given for Mode 1 and Mode 2 services. In the mid-term review of Foreign Trade Policy 2015-20, SEIS incentives to notified services were increased by 2 per cent.

Note: * According to NASSCOM

Sectoral Presentation (February, 2018)

Download PDF   Download  (Size: 1.22 MB )

Services Sector in India

Auto Components Clusters in India



Brand India Pharma


+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

India Now Magazine

Rural India


+ More Publications >

IBEF Publication


author_Siddartha-Sacheti-Jaipur-Gems-CEO.jpg "Indian jewellers, especially those with heritage, have massive potential as brands themselves"
Mr Siddhartha Sacheti, CEO - Jaipur Gems

Jaipur Gems is one of India's largest producers and exporters of gems and jewellery. It has an international presence via retail stores, and has won multiple internat...

author_logo-ibef1.jpg Mid-term review of foreign trade policy: An update
IBEF, Knowledge Centre

The Indian Government announced the mid-term review of Foreign Trade Policy 2015-20 on December 5, 2017. Overall, the policy is expected to make Indian exports more compe...

author_Satish-Kannan1.jpg Internet Proliferation is Making Access to Healthcare Easier
Satish Kannan, Co-founder and CEO, DocsApp

In today's age, it's sometimes easy to forget that the internet is not just for networking and entertainment. It has a purpose and a vast reach; when used correct...

author_logo-ibef1.jpg Auto Expo 2018
IBEF, Knowledge Centre

Held at two separate venues in 2018, the Auto Expo is India’s largest auto gathering. The Auto Expo 2018–Vehicles is scheduled to be held at India Expo Mart, ...

author_Amit_Wadhwani1.jpg 2018 to witness a green revolution in realty and infrastructure
Mr Amit Wadhwani, Director, Sai Estate Consultants

As the Indian real estate and infrastructure sectors look towards a greener future, the investment opportunities are promising and plentiful.In recent years, India has em...

author_logo-ibef1.jpg The Journey From Fragile Five to Favored Investment Destination
IBEF, Knowledge Centre

From being labeled the ‘Fragile Five’(a term coined Morgan Stanley to represent emerging market economies)in 2013 to become one of the most favored investment...

ideas More


Clean N' Green
Who thought banning plastic bags by the municipal corporation of Mangalore could spark the thought of creating eco-friendly products. Well, Mr Aswath Hegde, founder, EnviGreen Biotech Private Limited did. With a passion to preserve the environment and perseverance to achieve it, he and his friends created a 100 per cent..


Join now. Enjoy FREE subscriptions downloads, updates and more.


Already a member?
Login / Retrieve Password