The services sector of India remains the engine of growth for India’s economy and contributed 55% to India’s Gross Value Added at current prices in FY24 (as per advance estimates). As per the First Advance Estimates, Gross Value Added (GVA) in the services sector is estimated to grow at 10.7% in FY24, driven by 6.3% growth in the contact-intensive services sector. The services category ranked first in FDI inflows, as per data released by the Department for Promotion of Industry and Internal Trade (DPIIT). The services industry performed well in H1:2023-24, driven by Construction segment. India’s services sector GVA increased YoY by 11.43% to Rs. 72.69 trillion (US$ 871.59 billion) in FY24 (April-September), from Rs. 68.81 trillion (US$ 1,005.30 billion) in FY16. The sector provides employment to a large share of Indian population. The service sector has the highest employment generator rate.
The services sector has seen some developments, investments, and support from the Government in the recent past. As per first advance estimates for FY25, India’s services sector has steadily increased its share of GVA, rising from 50.6% in FY14 to about 55% in FY25, with 8.3% average growth since FY23. India’s gig economy is set to grow at a 17% CAGR, reaching US$ 455 billion (Rs. 38,42,475 crore) by FY24, potentially adding 1.25% to GDP by FY30 with 90 million jobs.
India has climbed to the 39th position out of 133 economies in the Global Innovation Index (GII) 2024, according to the World Intellectual Property Organization (WIPO).
Nearly half of the new jobs generated in FY23 are within the service sector, particularly in information technology (IT), banking, and finance segments.
India’s service exports stood at US$ 383.51 billion, whereas imports stood at US$ 341.06 billion in FY25.
The services trade surplus for FY25 is US$ 188.57 billion as compared to US$ 162.75 billion in FY24.
The Indian services sector was the largest recipient of FDI inflows worth Rs. 7,47,413 crore (US$ 1,16,723 million) between April 2000-December 2024.
During April 2000-December 2024, Mauritius emerged as the top investor. It was followed by Singapore, the USA, the Netherlands and Japan.
According to RBI’s Scheduled Banks’ Statement, deposits of all scheduled banks collectively surged by a whopping Rs. 2,33,56,673.93 crore (US$ 2,752.38 billion) as on April 18, 2025.
The service sector Purchasing Managers' Index (PMI) survey indicated a slight rise to 58.7 in April 2025, compared to 58.5 in March 2025.
India's medical tourism industry is poised for a robust resurgence, with projections indicating a significant rebound in the number of medical tourists surpassing pre-pandemic levels. Approximately 7.3 million medical tourists are expected to visit India in the calendar year 2024.
The telemedicine market is expected to reach US$ 5.4 billion by 2025, driven by increased demand for remote healthcare solutions and advancements in technology.
President Ms. Droupadi Murmu lauded the Reserve Bank of India (RBI) as the architect of the nation’s financial transformation, citing its role in enhancing financial inclusion, maintaining monetary stability, and fostering economic growth.
The country’s total broadband subscriber base stood at 944.96 million, as of December 2024. Teledensity (defined as the number of telephone connections for every 100 individuals) in India stood at 84.45%, as of December 2024.
During September-December 2024 top five broadband (wired+wireless) service providers in term of subscribers are Reliance Jio 476.58 million, Bharti Airtel 289.31 million, Vodafone Idea Ltd 126.38 million, BSNL 35.33 million and Atria Convergence 2.27 million.
There are more than 2,000 DPIIT-recognised fintech start-ups in India which are striving towards comparatively more contribution to the nation’s GDP.
By 2023, the fintech sector in India is expected to be US$ 1 trillion in Assets Under Management (AUM) and US$ 200 billion in revenue. The sector is estimated to reach US$ 150 billion by 2025.
India took the lead with the fintech adoption rate of 87%, substantially higher than the world average of 64%.
As per 2022 University Grants Commission (UGC) statistics, there are a total of 1,072 universities in the country, including 460 state universities, 128 deemed to be universities (a status of autonomy granted to high-performing institutes and universities by the Department of Higher Education), 54 central universities (established by the Department of Higher Education), and 430 private universities.
The healthcare industry is growing at a CAGR of 16% and the total public and private spending on healthcare is 4% of GDP. India's healthcare industry is expected to grow to hit US$ 50 billion in size by 2025.
It is predicted that 5G technology will boost the Indian economy by US$ 450 billion between 2023 and 2040. India’s 5G subscriber base is expected to grow 2.65 times, reaching 770 million by 2028, up from 290 million in 2024, according to Nokia’s annual Mobile Broadband Index (MBiT) report.
India’s service exports stood at US$ 383.51 billion, whereas imports stood at US$ 341.06 billion in FY25.
The services trade surplus for FY25 is US$ 188.57 billion as compared to US$ 162.75 billion in FY24.
The IT-BPM sector holds the potential to grow between 10-15% per annum. The IT and fintech segments provide over US$ 155 billion in gross value to the economy annually.
The IT and business services market will grow at a CAGR of 8.3% between 2021-26, reaching a US$ 20.5 billion valuation by the end of 2026.
India’s tourism and hospitality sector may earn US$ 50.9 billion as visitor exports by 2028.
Coforge Limited, a global digital services and solutions provider announced the opening of its centre of excellence (CoE) for the Metaverse and Web3 on August 30, 2022.
India’s data centre sector is experiencing significant growth, with 407 megawatts (MW) of information technology (IT) capacity absorbed and 191 MW added across key cities, driven by increasing demand for cloud computing, big data, Internet of Things (IoT), Artificial Intelligence (AI), e-commerce, and digital transformation.
India’s Software-as-a-Service (SaaS) industry is projected to reach Rs. 8,57,700 crore (US$ 100 billion) by 2035, up from Rs. 1,71,540 crore (US$ 20 billion) currently, driven by artificial intelligence (AI)-powered automation, cost-effective software development, and expanding small and medium business (SMB) adoption, according to a SaaSBoomi report.
Corporate India is expected to see annual salary hikes ranging from 6% to 15% in 2025, with variations depending on industry, role criticality, and niche skills.
As per data released on May 2023, Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (ABPM-JAY) achieved 50 million hospital admissions, providing free treatment worth Rs. 61,501 crore (US$ 7.4 billion) to the public, marking a significant milestone.
The Indian government is planning to introduce a credit incentive programme worth Rs. 50,000 crore (US$ 6.8 billion) to boost healthcare infrastructure in the country. The programme will allow companies to access funds to ramp up hospital capacity or medical supplies with the government acting as a guarantor.
Artificial Intelligence (AI) in healthcare is projected to contribute Rs. 2,18,325 - 2,61,990 crore (US$ 25-30 billion) to India’s GDP by 2025, enhancing accessibility, diagnostics, and treatment outcomes, according to a Deloitte report. Government-backed initiatives like the IndiaAI Mission and the Digital Personal Data Protection Act 2023 are shaping a digitally empowered healthcare ecosystem by ensuring responsible AI integration and stronger data security.
The Ministry of Health and Family Welfare (MoHFW) is leveraging artificial intelligence (AI) to enhance public health services across India.
In an effort to build IT capabilities and competitive advantage over international players, Indian companies plan to deploy ~10 cloud platforms to drive business transformation in sectors such as retail, telecommunication, and insurance, which is expected to boost growth in the IT & BPM sector.
The Government has undertaken various steps towards boosting growth of the services sector. The Government introduced ‘Services Exports from India Scheme’ (SEIS) aimed at promoting export of services from India by providing duty scrip credit for eligible exports. Under this scheme, a reward of 3-5% of net foreign exchange earned is given for Mode 1 and Mode 2 services.
Indian IT and business services market is projected to reach US$ 19.93 billion by 2025. In the healthcare sector, the telemedicine market is driving growth with the increasing demand for remote consultation. Advancements in technology and changing consumer preferences are likely to drive innovation and expansion in service offerings. Additionally, the increasing focus on sustainability and digital transformation is expected to shape the future landscape of the service sector, creating new opportunities for growth and development. By 2025, the telemedicine market in India is expected to reach US$ 5.5 billion. Home healthcare industry in India is expected to reach US$ 10 billion by 2025.
The implementation of the Goods and Services Tax (GST) has created a common national market and reduced the overall tax burden on goods. It is expected to reduce costs in the long run-on account of availability of GST input credit, which will result in the reduction in prices of services. India's software service industry is expected to reach US$ 1 trillion by 2030.
Overall, the service sector is anticipated to play a significant role in the economy, contributing to employment opportunities and economic development in the coming years.
Note: *- Services sector includes Financial, Banking, Insurance, Non-Financial / Business, Outsourcing, R&D, Courier, Tech Testing and Analysis, Other
