Trade Analytics
Services
At current prices, the sector grew 12.75 per cent year-on-year (in Rs terms) in 2018-19.

Services Industry Analysis

Latest update: September, 2019

Growth

 

Last Updated: September, 2019

Services sector is the biggest one in India and contributes more than half of Gross Value Added (GVA). Services sector grew at a CAGR of 6.96 per cent to Rs 94.80 lakh crore (US$ 1,356.49 billion) in FY19 from Rs 59.18 lakh crore (US$ 846.84 billion) in FY12. Growth rate of financial, real estate and professional services was estimated at 12.71 per cent (in Rs terms) in FY19. Trade, hotels, transport, communication and services related to broadcasting are estimated to have recorded 11.63 per cent growth (in Rs terms) in FY19.

The sector also provides employment to a large share of Indian population. As of 2018, 31.45 per cent of India’s employed population was working in the services sector.

Also, services exports comprise a major part of the total exports of India. Net export estimated from April to August 2019 in services is US$ 93.82 billion and import is US$ 61.86 billion. India is ranked as the eighth largest exporter of commercial services globally in 2017.

Moreover, Services sector is the largest recipient of FDI in India with inflows of US$ 74.94 billion between April 2000 and June 2019.

The sector has continuously recorded strong growth. Nikkei India Services Purchasing Managers Index (PMI) 53.8 in July 2019, indicating an expansion but fall in August 2019 to 52.4.

Sub-sectors that are performing well within the services sector are:

Aviation – India’s air passenger traffic doubled to 308.75 million in FY19 witnessing a growth of 12.64 per cent year-on-year. For FY20, passenger and freight traffic during Apr-July 2019 reached 113.44 million and 1.14 million tonnes, respectively.

Information technology-business process management (IT-BPM) –IT BPM industry revenues grew 8.38 per cent year-on-year to Rs 12.65 lakh crore (US$ 181 billion) in FY19E from US$ 167 billion in FY18.

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 to 5 per cent of net foreign exchange earned is given for Mode 1 and Mode 2 services. Further, in the mid-term review of Foreign Trade Policy 2015-20, SEIS incentives to notified services were increased by 2 per cent. Also, the Government of India has identified 12 sectors under the Champion Services Sectors Initiative which is aimed at formulating cross-cutting action plans to promote their growth.

Notes: P – Provisional, E-Estimate,^International Labour Organisation Estimates

Indian Services Industry Report (September, 2019)
Download PDF Download PDF  (Size: 1.16 MB )

Click to access the Services Industry Archived Report

IBEF Blog - INDIA ADDA – PERSPECTIVES ON INDIA More

author_logo-ibef1.jpg Indian Tourism Industry: An Insight
IBEF, Knowledge Centre

During the celebration of 73rd Independence Day, Prime Minister Mr Narendra Modi addressed the nation from the Red Fort and underlined that India ‘has mu...

author_alok_kirloskar1.jpg From smart water pumps to drones: Technology is changing Indian farms!
Alok Kirloskar, Executive Director, Kirloskar Brothers Limited

Disruptive technologies and innovations in application engineering are fast changing farming practices in India. From preparing the land to sowing, to reaping and mentori...

author_logo-ibef1.jpg Mobile Phone Manufacturing in India: Towards A Brighter Future!
IBEF, Knowledge Centre

India is the world’s second largest mobile phone manufacturer after China. And with the current pace of growth, India is not far from becoming the leading handset m...

author_logo-ibef1.jpg Solar energy generation in India: Lighting lives!
IBEF, Knowledge Centre

The generation of power from solely renewable sources like solar energy is a prime focus of India’s energy planning. Started in the early 1970s, the process of crea...

author_logo-ibef1.jpg Digital payment industry in India
IBEF, Knowledge Centre

From being primarily a cash-obsessed economy, India’s digital payment story is new but exciting. Driven by progressive regulatory policies and increased use of mobi...

author_logo-ibef1.jpg The Indian Hotel Industry, Sunshine Ahead
IBEF, Knowledge Centre

Ever expanding domestic tourism, increasing foreign tourist arrivals, forex earnings growth, high airline passenger numbers and muted supply growth has put the Indian hot...

ideas More

Ideas

Zomato: Top Of The Food Chain
Zomato, an Indian start-up is in the business of online food ordering. It initially launched Foodiebay.com in Gurugram in 2008, a website that scanned menus and provided ratings and recommendations on....

JOIN IBEF.org

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

Error

Already a member?
Login / Retrieve Password