Last Updated: February 05, 2019
Last Updated: January, 2019
The services sector is not only the dominant sector in India’s GDP, but has also attracted significant foreign investment flows, contributed significantly to exports as well as provided large-scale employment. India’s services sector covers a wide variety of activities such as trade, hotel and restaurants, transport, storage and communication, financing, insurance, real estate, business services, community, social and personal services, and services associated with construction.
The services sector is the key driver of India’s economic growth. The sector has contributed 57.12 per cent of India’s Gross Value Added at current price in H1 2018-19. Net service exports stood at US$ 38.95 billion in H1 2018-19 (P).
Nikkei India Services Purchasing Managers' Index (PMI) stood at 53.7 in November 2018. The expansion in November 2018 was marked with boost in output, the strongest since July 2018.
Some of the developments and major investments by companies in the services sector in the recent past are as follows:
The Government of India recognises the importance of promoting growth in services sectors and provides several incentives in wide variety of sectors such as health care, tourism, education, engineering, communications, transportation, information technology, banking, finance, management, among others.
Prime Minister Narendra Modi has stated that India's priority will be to work towards trade facilitation agreement (TFA) for services, which is expected to help in the smooth movement of professionals.
The Government of India has adopted a few initiatives in the recent past. Some of these are as follows:
Following are the achievements of the government in the past four years:
Services sector growth is governed by both domestic and global factors. The Indian facilities management market is expected to grow at 17 per cent CAGR between 2015 and 2020 and surpass the US$19 billion mark supported by booming real estate, retail, and hospitality sectors.
The implementation of the Goods and Services Tax (GST) has created a common national market and reduced the overall tax burden on goods. It is expected to reduce costs in the long run on account of availability of GST input credit, which will result in the reduction in prices of services.
Exchange Rate Used: INR 1 = US$ 0.0142 as on Q2 FY18
References: Media Reports, Press Releases, DIPP publication, Press Information Bureau,
Note: P - Provisional, ^As per Motilal Oswal, Q1 2018-19 – April-June 2018
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Last Updated: February 05, 2019
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