Advantage India
Robust
Demand
*India’s services sector is projected to grow by 9.1% in FY26, up from 7.2% in FY25, indicating an acceleration in services-led economic expansion. In FY2025–26, the sector contributed approximately 56.4% of India’s Gross Value Added (GVA), up from around 51% in FY2013–14, underscoring its increasing role in domestic value creation.
*India has emerged as the world’s seventh-largest exporter of services, with its share in global services trade more than doubling from 2% in 2005 to 4.3% in 2024. The sector also continues to attract the highest share of foreign direct investment (FDI) 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.
Competitive
Advantage
*India has climbed to the 38TH position out of 133 economies in the Global Innovation Index (GII) 2024, according to the World Intellectual Property Organization (WIPO).
*NITI Aayog’s findings on state-level and sector-level dynamics 2025 report says that states like Karnataka, Maharashtra, Tamil Nadu and Telangana together account for nearly 40% of services output, driven by modern, high-productivity services such as IT, finance and professional services, resulting in a concentration of output in highly urbanised states, particularly in southern India.
Policy
Support
*The services sector is receiving strong policy support under the Union Budget 2026–27, including the proposed ‘Education-to-Empowerment and Enterprise’ Standing Committee to drive coordinated reforms and achieve a 10% global share in services exports by 2047. Targeted tax and regulatory measures for IT and IT-enabled services such as unified classification, higher safe-harbour thresholds, automated approvals, and faster Advance Pricing Agreements are aimed at enhancing India’s attractiveness for Global Capability Centres (GCCs).
*The Union Budget introduces incentives to attract global cloud service providers through India-based data centre infrastructure.
Increasing
Investments
*100% FDI is allowed for any regulated financial sector activity under the automatic route.
*As of March 2025, experts forecast that India is poised to attract over Rs. 52,32,600 crore (US$ 610 billion) in alternative investments, primarily private equity and venture capital, from 2025 to 2027, substantially powering the startup ecosystem.
*The Services sector remained the largest recipient of FDI inflows in India, attracting US$ 128.85 billion in cumulative equity inflows between April 2000 and March 2026.
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