Published: 21st Apr, 2022
The services sector is not only the dominant sector in India’s GDP, but has also attracted significant foreign investment, has contributed significantly to export and has 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.
Share of the services sector accounted for 54% of the total GVA in FY21. India’s services sector GVA increased at a CAGR of 11.43% to Rs. 101.47 trillion (US$ 1,439.48 billion) in FY20, from Rs. 68.81 trillion (US$ 1,005.30 billion) in FY16. Between FY16 and FY20, financial, real estate and professional services increased at a CAGR of 11.68% (in Rs. terms), while trade, hotels, transport, communication and services related to broadcasting rose at a CAGR of 10.98% (in Rs. terms).
Services exports comprise a major part of the total export from India. According to the RBI, between April 2021 and September 2021, India’s service exports stood at US$ 114.58 billion, whereas imports stood at US$ 65.08 billion.
In October 2021, the India Services Business Activity Index/ Nikkei/IHS Markit Services Purchasing Managers' Index stood at 58.4, compared with 55.2 recorded in September 2021. The India Services Business Activity Index/ Nikkei/IHS Markit Services Purchasing Managers' Index stood at 55.2 in September 2021, compared with 56.7 in August 2021.
- Demand: India is the export hub for software services. The Indian IT outsourcing service market is expected to witness 6–8% growth between 2021 and 2024. India‘s IT and business services market is projected to reach US$ 19.93 billion by 2025.
- Advantage: In September 2021, India moved up two spots to 46 in the Global Innovation Index (GII) 2021, due to successful advancements in services that are technologically dynamic and can be traded internationally.
- Policy Support: Government is promoting necessary services and will charge zero tax for education and health services under the GST regime. In October 2021, the government announced a new helicopter policy to build dedicated hubs and corridors, the policy will boost helicopter services in the country.
This data story aims to highlight the statistics related to the services sector in India.
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