Indian Economy News

From Stability to New Frontiers, India’s services exports growth more than doubled from 7.6% in the pre-pandemic period (FY16-FY20) to 14% during FY23-FY25

The services sector in India has emerged as the driving force behind resilience and export performance, now accounting for more than half of the country’s Gross Value Added (GVA), and helping to sustain jobs as the world remains uncertain. The Economic Survey 2025-26, tabled in Parliament, reveals that the sector is growing at 9.1% in FY26, boosting overall Gross Value Added (GVA) with broad-based growth in sub-sectors. India is the 7th largest international services exporter, increasing its share of global services trade. On average, the services sector’s exports have more than doubled from 7.6% in the pre-COVID FY16- FY20 to around 14% in FY23-FY25, led by software services, which alone contribute over 40% to exports, and performing well in professional and management consulting services. The services share of GDP increased to 9.7% in FY23- FY25, which helped to cushion the economy when conditions in goods trade were less favourable. Sub-sectors such as travel and tourism, foreign exchange earnings from tourism touching US$ 35 billion, and the thriving digital services sector indicate changing demand trends.

The release underscores key structural shifts: services FDI now accounts for about 80.2% of total FDI in FY23-FY25, IT-ITeS sector revenues grew to US$ 283 billion in FY25, data center capacity is being augmented, and an active tech startup ecosystem is propelling the sector forward. Regional disparities remain, with states like Karnataka, Maharashtra, and Tamil Nadu leading in production. The Economic Survey also identifies areas of potential growth in ocean commercialization, media and entertainment, and space services. It emphasizes the need for skills upgradation, an enabling policy environment, and focused tourism strategies to maintain the sector’s momentum.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.