New Delhi

India’s services sector continues to be the primary engine of economic growth, contributing more than half of the country’s Gross Value Added (GVA) and playing a pivotal role in employment generation, exports and investment, the Economic Survey tabled in Parliament on Thursday said.

The Survey, presented by Finance Minister Nirmala Sitharaman, noted that the services sector has demonstrated remarkable resilience amid global economic uncertainty and is now transitioning from traditional growth drivers to emerging high-value segments.

According to the document, the sector has consistently outperformed others in recent years, supported by strong domestic demand, rapid digital transformation and expanding global linkages. It highlighted that global trade in services has grown faster than merchandise trade over the past decade, led by knowledge-intensive segments such as information technology, business services, finance and professional services.

India has further consolidated its position as a leading global exporter of services, particularly in IT and digitally delivered services. The Survey said the country remains among the world’s top exporters of commercial services, benefitting from a skilled workforce, cost competitiveness and widespread technology adoption. The growing importance of digital public infrastructure and cross-border data flows has also enhanced India’s competitiveness in global services markets.

The Survey observed steady post-pandemic growth in the services sector, aided by a recovery in contact-intensive segments such as tourism, hospitality, transport and trade. High-frequency indicators, including GST collections, e-way bills, air passenger traffic and hotel occupancy rates, point to sustained momentum in services activity.

The sector continues to attract the largest share of foreign direct investment (FDI), reflecting sustained investor confidence in India’s growth prospects. While IT and IT-enabled services remain central, the Survey noted that newer segments are increasingly contributing to growth.

Financial services have expanded with deeper digital penetration and increased formalisation, while real estate and construction-linked services have benefitted from urbanisation and rising housing demand. Logistics and transport services have gained from infrastructure expansion and policy reforms, and tourism and travel services have seen a sharp revival, driven by rising domestic travel and improved connectivity.

The Survey also underlined the growing importance of emerging services such as fintech, healthcare, education, research and development, and global capability centres (GCCs).

Looking ahead, it emphasised the need to strengthen skill development, promote innovation and enhance regulatory frameworks to sustain services-led growth. It called for leveraging digital technologies, improving ease of doing business and deepening India’s integration with global services value chains.

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With supportive policies and continued investment in human capital and technology, the Survey said India’s services sector is well positioned to move beyond stability towards new growth frontiers and remain a cornerstone of the country’s economic transformation.