Indias Service Sector Scales New Heights Towards $5 Trillion Economy
For decades, the sector has not only been contributing massively to India's gross domestic product (GDP) but has also become the key driving force to the nation's economy, rising from 40 per cent contribution in GDP in the 1990s to accounting for 55 per cent gross value added (GVA) in FY25, according to the Axis Mutual Fund's 'Service Sector Report'.
'From contributing approximately 40 per cent of India's GDP in the early 1990s, the service sector surged to account for 50.6 per cent of India's gross value added (GVA) in FY14. This dominance has only amplified, reaching an estimated 55 per cent in FY25," the report stated.
All verticals of the service sectors, including information technology (IT) services, finance and banking, healthcare, telecommunications, and e-commerce, have shown immense growth in the last two decades.
IT services grew from $8 billion in 2000 to $245 billion in FY24, with further expansion to $300 billion expected by FY26.
The digital revolution gave a magic shift to the Banking Financial Services and Insurance (BFSI) sector, with mutual fund AUM growing at over 20 per cent CAGR over the past decade to reach Rs 72.19 lakh crore in May 2025, the Axis Mutual Fund report said.
The healthcare market size is projected to reach $370 billion by 2027, with 62 per cent year-on-year growth reported in March 2025 alone.
The telecom sector has seen data consumption per user soar 450 times since 2014, reaching 28 GB per month in 2025, and the e-commerce market is expected to triple from $103 billion in 2024 to $325 billion by 2030, it added.
India's nominal GDP doubled in in last decade (2015-2025). In FY25, it reached to nearly $3.97 trillion and is estimated to surge to around $4.19 trillion by the end of the calendar year, providing a formidable foundation for the service sector's expansion.
Rapid digitisation under the 'Digital India' initiative, proactive government policies including ease of doing business policies, liberalisation in foreign Direct Investment (FDI) norms, and sector-specific incentives have been creating a fertile ground for the upscale of the service sector, the report said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
22 minutes ago
- Economic Times
Happy Square Outsourcing IPO to list today. GMP signals mild premium over issue price
HR tech firm Happy Square Outsourcing Services is set to debut on the NSE SME platform on July 10, following the successful closure of its Rs 24.25 crore IPO earlier this week. The issue, which was entirely a fresh offering of 31.9 lakh equity shares, had garnered decent investor interest, ending with an overall subscription of 3.58 times. ADVERTISEMENT The IPO was priced at Rs 76 per share, and market chatter suggests a grey market premium (GMP) of around 7%, translating to an expected listing price in the vicinity of Rs 81 to Rs 82. The relatively strong GMP, paired with decent subscription across categories—2.12x in retail, 2.24x in NII, and 7.16x in QIB—points to a stable demand curve as the stock gears up for its market debut. Incorporated in 2017, Happy Square is engaged in technology-driven HR outsourcing solutions including recruitment, payroll, onboarding, and flexible staffing. With operations in both India and the US, the company had 4,225 personnel deployed on client sites as of July 2024, supported by a core team of 151 employees. Its client-centric, scalable model and ISO 9001:2015 certification have helped it carve a niche in the fragmented staffing and consulting the company has shown a healthy growth trajectory. Revenue rose 40% year-on-year in FY25 to Rs 97.68 crore, while profit after tax jumped 34% to Rs 5.90 IPO proceeds are primarily being directed towards working capital needs (Rs 19 crore). The lead manager for the issue was Corpwis Advisors, while Giriraj Stock Broking acted as market maker. Purva Sharegistry handled registrar duties. ADVERTISEMENT (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
New Indian Express
22 minutes ago
- New Indian Express
Karnataka's US roadshow generates Rs 5,500 crore prospective investments
BENGALURU: In a significant boost to its innovation and technology ecosystem, the state government has wrapped up a 10-day roadshow across the United States, generating prospective investments worth Rs 5,500 crore. These investments are expected to span talent acquisition, infrastructure development, Research and Development, and collaborative ventures, collectively projected to create employment opportunities for more than 7,200 individuals, with further investments actively in the pipeline. Organised by the Department of Electronics, IT and Biotechnology, the roadshow covered Boston, New York, and San Francisco between June 16 and 25. The state-led delegation engaged with over 120 companies, from multinational corporations to startups, visiting leading academic institutions, and hosting roundtables. Several MoUs and Letters of Intent were signed as part of this initiative. The official delegation was led by Dr Ekroop Caur, Secretary at the Department of Electronics, IT/BT, alongside Hoskote MLA and Chairman of KEONICS, Sharath Bachegowda, among others, to highlight Karnataka's dynamic policy framework, deep talent pool, and collaborative potential across sectors including Biotechnology, Electronics System Design and Manufacturing (ESDM), and Deep Tech. During the roadshow, the state participated in global conferences. The BIO International Convention in Boston attracted over 20,000 participants from 72 countries to the India Pavilion.
India.com
31 minutes ago
- India.com
IDBI Bank Disinvestment: Strategic Sale Likely To Be Completed By October 2025, Say Sources
New Delhi: Disinvestment in state-run IDBI Bank is set to be completed by October, with the process of financial bids and the lender's announcements in the same month, sources told Zee Business. Earlier, the government had said that the bank's deal is expected to be concluded within the current financial year. Public sector banks are expected to raise funds to the tune of Rs 40,000-45,000 crore through the qualified institutional placement (QIP) route this year, including State Bank of India's Rs 20,000 crore, said the sources. They said that SBI's QIP will be launched soon, with the government's approval already in place. Also, Punjab & Sind Bank, Indian Overseas Bank (IOB), Central Bank of India, and UCO Bank will offload stakes through the offer for sale (OFS) route. The Department of Financial Services (DFS) has also given the nod to Life Insurance Corporation's OFS. Part of a broader disinvestment strategy, the LIC OFS is set to promote retail participation while unlocking value in the PSU insurance major. Bank of Maharashtra will also launch a QIP during the year, in order to meet the minimum public shareholding requirement, according to the sources. As per rules, at least 25 per cent of a listed company's total shares must be held by public shareholders. In another significant development, the deadline for such companies to meet the minimum public shareholding norms may be extended from 2026 to 2027. The proposed offloading of government stake in IDBI Bank has been delayed several times over the past three years. Currently, Government of India and LIC jointly own 94.71 per cent of IDBI Bank. --By Tarun Sharma (The Story Originally Appeared In
