Services sector is estimated to have grown by 9.1% in FY26, up from 7.2% in FY25, indicating a further acceleration in services-led expansion. Services’ share in GDP rose to 53.6% in H1 FY26, while its share in GVA reached a historic high of 56.4% as per the FY26 First Advance Estimates, reflecting the rising importance of modern, tradable, and digitally delivered services. The sector provides employment to a substantial portion of the Indian population and continues to be the highest employment generator in the country.
India’s services exports stood at approximately Rs. 36,97,862 crore (US$ 418.31 billion) in FY 2025-26 (April-March), while service imports stood at Rs. 18,06,005 crore (US$ 204.42 billion) in the same period reinforcing India's global standing. The services trade surplus increased to US$ 213.89 billion in FY2025–26 (April–March), compared to US$ 188.84 billion in FY2024–25, reflecting the continued strength of India's services exports. India has also climbed to 38th position out of 133 economies in the Global Innovation Index (GII) 2025, highlighting its growing strength in knowledge and innovation.
Sales of non-IT services companies recorded a growth of 10.6% in Q2 FY26 as compared to 7.5% growth in Q1 FY26.
Employment generation in the sector continues to outpace manufacturing, with nearly three jobs created in services for every one in manufacturing. The sector currently employs about 182 million people, with trade, transport, education, finance, and healthcare being major contributors. Between April 2000 and March 2026, India’s services sector attracted FDI inflows of Rs. 8,53,631 crore (US$ 128,853 million), with Singapore emerging as the top investor, followed by Mauritius, the USA, the Netherlands, and Japan.
The financial services segment has witnessed remarkable growth. According to the RBI's Scheduled Banks' Statement of Position in India, total deposits (excluding inter-bank deposits) held by all scheduled banks increased to Rs. 26,188,292.15 crore (US$ 2.96 trillion) as of April 15, 2026. India’s FinTech industry was valued at US$ 44.1 billion in 2025 and is projected to grow at a 16.6% CAGR through 2030. In H1 2025, the sector secured approximately US$ 889 million in funding, ranking third globally, with Bengaluru accounting for 55% of total investments.
The fintech adoption rate in India stands at 87%, significantly above the global average of 67%, reflecting the country’s rapid digital financial integration.
Telecom and IT services remain key pillars of the sector. The number of total telephone subscribers in India increased from 1330.58 million at the end of March 2026 to 1337.54 million at the end of April 2026, thereby showing a monthly growth rate of 0.52%. Correspondingly, overall tele-density in India increased from 93.26% at the end of March 2026 to 93.69% at the end of April 2026.
The number of wireless (mobile) subscribers increased from 1,265.73 million at the end of March 2026 to 1,271.90 million at the end of April 2026 thereby registering a monthly growth rate of 0.49%. Wireless (mobile) subscription in urban areas increased from 726.51 million at the end of March 2026 to 730.30 million at the end of April 2026.
At the end of April 2026, Reliance Jio Infocomm Ltd. leads the market with 505.92 million in term of wireless (mobile) subscribers , maintaining a substantial lead over competitors. Bharti Airtel Ltd. ranks second with 487.36 million subscribers, followed by Vodafone Idea Ltd. at 201.21 million.
The IT & BPM sector continues to grow strongly, with exports rising 12.48% in FY25 to Rs. 19,19,456 crore (US$ 224 billion), of which IT services accounted for over 65%. The sector is expected to add 1,26,000 net new employees in FY25, taking the total workforce to 5.8 million.
Healthcare and digital services have emerged as significant growth drivers. The Indian healthcare sector is projected to reach Rs. 5,467,022 crore (US$ 638 billion) by 2025, growing at a 22.5% CAGR over the past seven years. Telemedicine alone reached Rs. 31,191 crore (US$ 3.64 billion) in 2025 and is expected to grow to Rs. 90,660 crore (US$ 10.58 billion) by 2030. India's digital healthcare transformation continues to accelerate through the Ayushman Bharat ecosystem. As of February 2026, 43.52 crore Ayushman cards have been created under Ayushman Bharat–PMJAY, including 1.14 crore Ayushman Vay Vandana cards for senior citizens aged 70 years and above. The scheme has empanelled 36,229 hospitals nationwide, comprising 19,483 public and 16,746 private hospitals, while providing cashless treatment for 1,961 procedures across 27 medical specialties.
In Feb 2026, The Government of India announced a scheme to establish five Regional Medical Hubs through public-private partnerships to strengthen medical tourism. The hubs will integrate healthcare, research, diagnostics, rehabilitation, and AYUSH services, positioning India as a global destination for medical value travel.
AI in healthcare is expected to contribute Rs. 2,18,325-2,61,990 crore (US$ 25-30 billion) to India’s GDP by 2025.
India’s digital health market is projected to grow from approximately US$ 14.5 billion in 2024 to nearly US$ 107 billion by 2033, highlighting the increasing reliance of healthcare systems on digital infrastructure and technology.
On November 20, 2025, Tata Consultancy Services partnered with TPG to invest up to Rs 18,000 crore in its AI data centre platform HyperVault, aimed at building GW-scale AI-ready infrastructure and strengthening India’s digital infrastructure ecosystem
The Union Budget 2025 has significantly increased allocation for the BharatNet project by 238% year-on-year to Rs. 22,000 crore (US$ 2.6 billion) in 2025–2026, aimed at expanding broadband connectivity in rural government-run secondary schools and primary healthcare centres (PHCs). The initiative targets a large opportunity base of around 1 million government-run schools, building on earlier phases where Rs. Rs 42,000 crore was allocated to connect 214,323 Gram Panchayats.
India’s 5G subscriber base is projected to surge to 1.1 Billion by 2031, while average monthly mobile data use is expected to reach 70 GB per smartphone.
India's data centre capacity has quadrupled from approximately 375 MW in 2020 to around 1.5 GW in 2025, driven by growing demand for AI, cloud computing, and digital services. While India generates nearly 20% of global data, it hosts only around 3% of the world's data centres, highlighting significant growth potential. To strengthen AI infrastructure, the Government has onboarded 38,231 GPUs through 14 empanelled data centres, with data centre power demand projected to reach 13.56 GW by 2031–32.
In Feb 2026, The Government launched Atal Tinkering Labs (ATL) as a new flagship initiative with an allocation of Rs. 3,200 crore (USD 362 million) in FY2026–27 to establish innovation labs and promote STEM, AI, robotics, and coding education in schools.
Education and research infrastructure continues to expand, with 23 Indian Institutes of Technology (IITs), 21 Indian Institutes of Management (IIMs), and 20 All India Institutes of Medical Sciences (AIIMS) operational by June 2025, strengthening India’s human capital for services and technology.
Tourism, hospitality, and sustainable sectors are contributing to exports and employment. India’s tourism and hospitality sector may earn US$ 50.9 billion in visitor exports by 2028, while the sustainable tourism market is projected to grow from Rs. 317 crore (US$ 37 million) in 2025 to Rs. 1,851 crore (US$ 216 million) over the next decade.
The Union Budget 2026–27 introduced a Scheme to Support States in establishing five Regional Medical Hubs, aimed at promoting India as a global destination for medical and wellness tourism. The hubs will integrate advanced healthcare services, AYUSH centres, and medical value tourism facilitation centres, and infrastructure for diagnostics, post-care and rehabilitation through public-private partnerships, enhancing India’s competitiveness in global healthcare travel.
Based on the India Tourism Data Compendium 2025 by the Ministry of Tourism, the sector contributes 5.22% to India’s GDP (total impact), with a direct share of 2.72%. It also supports 13.34% of total employment, with a direct employment share of 5.82%, reflecting its strong role in livelihood generation and inclusive development.
In Feb 2026, The Government announced a scheme to establish five Regional Medical Hubs under a public-private partnership model to strengthen India's position as a global medical tourism destination.
In 2024–25, the Ministry of Tourism launched the ‘Challenge Based Destination Development’ initiative under the Swadesh Darshan 2.0 scheme to promote holistic and sustainable development of tourist destinations and enhance the overall tourist experience. Under this initiative, 38 projects have been sanctioned across the country with an investment of approximately Rs. 698 crore.
International Tourist Arrivals (ITAs), including Foreign Tourist Arrivals (FTAs) and arrivals of Non-Resident Indians (NRIs), reached 20.57 million in 2024, reflecting an 8.9% increase over 2023. Within this, medical and wellness tourism is emerging as a high-potential segment, growing faster than traditional leisure tourism and offering high-value, non-seasonal demand.
To support export growth, the government had introduced the Service Exports from India Scheme (SEIS) under FTP 2015–20, which provided duty credit scrips worth 3–7% of net foreign exchange earnings. However, the scheme was discontinued from April 1, 2020, and currently there is no direct replacement incentive for service exporters. As a result, exporters are increasingly focusing on operational efficiency and cost optimisation in international transactions.
The IT & BPM sector is poised for further growth with planned deployment of ~10 cloud platforms across key industries, enabling Indian companies to strengthen global competitiveness.
Corporate India remains optimistic, with annual salary hikes projected between 6% and 15% in 2025, depending on industry, role criticality, and niche skills. The software services sector alone is expected to grow from Rs. 13,55,530 crore (US$ 158 billion) in 2025 to Rs. 16,96,662 crore (US$ 198 billion) by 2030 at a 4.57% CAGR, driven by AI adoption, value-led partnerships, and strong talent.
India’s services sector is poised for sustained growth, underpinned by robust exports, technological adoption, and expanding employment opportunities. With advancements in digital infrastructure, fintech, healthcare, education, and tourism, the sector is strengthening India’s global competitiveness and driving innovation across multiple domains. Looking ahead, continued investment, policy support, and technology integration are set to reinforce the services sector as a key engine of economic growth, creating new opportunities for talent, businesses, and international collaboration.
Note: Services sector includes Financial, Banking, Insurance, Non-Financial/Business, Outsourcing, R&D, Courier, Tech Testing and Analysis, Other
