India's services sector 'epochal opportunity' for investors: Report
- IBEF
- July 9, 2025
India’s services sector contributed 55% to the country’s Gross Domestic Product (GDP) in FY25, up from 40% in the early 1990s, positioning it as a key driver of wealth creation, according to Axis Mutual Fund’s report, “Scaling New Heights – India’s Service Sector Report”. The sector is central to India’s ambition of becoming a Rs. 4,28,35,000 crore (US$ 5 trillion) economy and represents a major opportunity for both domestic and international investors. Between FY23 and FY25, the sector recorded an average annual growth rate of 8.3%, with sub-sectors like information technology (IT), financial services, healthcare, telecommunications, and e-commerce witnessing rapid acceleration due to digitalisation, rising incomes, and urbanisation.
IT services are expected to grow by 4–6% in FY26, driven by the adoption of generative artificial intelligence (AI) and cloud computing. Financial services are continuing a strong digital shift, with mutual fund assets growing over 20% compound annual growth rate (CAGR) in the last decade. Healthcare saw a 62% YoY growth in March 2025, supported by rising demand and technology integration. Indian e-commerce is projected to expand from Rs. 8,82,401 crore (US$ 103 billion) in 2024 to Rs. 27,84,275 crore (US$ 325 billion) by 2030. The services sector attracted the highest share of foreign investments in FY25, 19% of the total. Investment avenues include sector-specific mutual funds, stocks in IT, banking, telecom, healthcare, and emerging areas like fintech, medtech, and premium services.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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