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.
The services sector of India remains the engine of growth for India’s economy and contributed 53% to India’s Gross Value Added at current prices in FY21-22 (as per advance estimates). 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 augmented 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). India‘s IT and business services market is projected to reach US$ 19.93 billion by 2025.
Some of the investments/ developments in the services sector in the recent past are as follows:
The Indian services sector was the largest recipient of FDI inflows worth US$ 94.19 billion between April 2000-March 2022. The services category ranked 1st in FDI inflow as per data released by the Department for Promotion of Industry and Internal Trade (DPIIT).
In April 2022, the Manufacturing Purchasing Managers’ Index (PMI) in India stood at 54.7 from 54 in March 2022.
India’s service exports stood at US$ 254.4 billion, whereas imports stood at US$ 144.79 billion in FY 2021-22.
According to RBI:Bank credit stood at Rs. 119.55 trillion (US$ 1.53 trillion), as of 22 April, 2022.
Credit to non-food industries stood at Rs. 119.12 trillion (US$ 1.52 trillion), as of 22 April, 2022.
In June 2022, HCL Technologies (HCL), a leading global technology company, announced the opening of its new 9,000 sq. ft. delivery center in Vancouver, Canada. The new center will significantly expand its presence in the country to serve clients primarily in the HiTech industry.
India’s telephone subscriber base expanded at a CAGR of 2.55% between FY16 and FY21 to reach 1,166.93 million in FY22.
IT-BPM industry revenues stood at US$ 227 billion in FY22 with a YoY growth rate of 15.5%.
In the first-half of 2021, private equity investments in India stood at US$ 11.82 billion, as compared with US$ 5.43 billion in the same period last year.
By October 2021, the Health Ministry’s eSanjeevani telemedicine service, crossed 14 million (1.4 crore) teleconsultations since its launch, enabling patient-to-doctor consultations, from the confines of their home, and doctor-to-doctor consultations.
The Indian healthcare industry is expected to shift digitally enabled remote consultations via teleconsultation. The telemedicine market in India is expected to increase at a CAGR of 31% from 2020 to 2025.
In December 2020, the 'IGnITE’ programme was initiated by Siemens, BMZ and MSDE to encourage high-quality training and technical education. 'IGnITE' aims to develop highly trained technicians, with an emphasis on getting them ready for the industry and future, based on the German Dual Vocational Educational Training (DVET) model. By 2024, this programme aims to upskill ~40,000 employees.