Services Sector in India

India‘s Domestic IT Services market is expected to grow by 3-5% in FY25, also the operating profit for the sector to remain 21-22%.

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. The sector’s share in GDP increased to 53.6% in H1 FY26, while its contribution to GVA reached a historic high of 56.4% (FY26 First Advance Estimates), underscoring the rising importance of modern, tradable, and digitally delivered services.

*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 are on an impressive upward trajectory, with projections indicating they will surge to an estimated US$ 465-475 billion in the current fiscal year (2025-26). This represents a substantial leap from the US$ 387 billion recorded in 2024-25.

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.

*The Union Budget introduces incentives to attract global cloud service providers through India-based data centre infrastructure. It proposes tax holidays until 2047 for foreign companies delivering cloud services from India, along with a 15% safe harbour margin for related data centre service entities, to support infrastructure development and boost investment.

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 remains the largest recipient of foreign direct investment (FDI) inflows, accounting for an average of 80.2% of total FDI during FY23–FY25, up from 77.7% in the pre-pandemic period (FY16–FY20).

Snapshot Showcase Infographics Reports

Last updated: Feb, 2026

HDFC Bank

HDFC Bank Limited is a holding company. The bank offers a range of banking services covering commercial and investment banking on the wholesale side and transactional/branch banking on the retail side. It also offers financial services. The bank's segments include treasury, retail banking, wholesale banking and other banking business. The treasury segment primarily consists of net interest earnings from the Bank's investment portfolio, money market borrowing and lending, gains, or losses on investment operations and accounts of trading in foreign exchange and derivative contracts. The retail banking segment serves retail customers through a branch network and other delivery channels, as well as through alternative delivery channels. The bank provides its corporate and institutional clients with a range of commercial and transactional banking products. The other banking business segment includes income from para-banking activities.

Company Website

Tata Consultancy Service Ltd

Tata Consultancy Services (TCS) is an IT services, consulting and business solutions organisation that delivers real results to global businesses, ensuring a level of certainty no other firm can match. TCS offers a consulting-led integrated portfolio of IT, BPO, infrastructure, engineering, and assurance services. This is delivered through its unique Global Network Delivery Model (GNDM) recognized as the benchmark of excellence in software development.

TCS has over 4,53,540 of the world's best-trained consultants in 46 countries. It is a part of the Tata Group, India's largest industrial conglomerate. The company is India's first listed IT company to reach the US$ 100 billion market capitalisation mark.

Company Website

Bharti Airtel

Bharti Airtel Limited is a leading global telecommunications company with operations in 16 countries across Asia and Africa. It is headquartered in New Delhi, India. The company ranks amongst the top three mobile service providers globally in terms of subscribers. In India, the company's product offerings include 2G, 3G and 4G wireless services, mobile commerce, fixed line services, high-speed home broadband, DTH, and enterprise services including national & international long-distance services to carriers. In the rest of the geographies, it offers 2G, 3G, and 4G wireless services and mobile commerce.

Company Website

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