New Delhi– India is the second fastest growing services economy in the world at 10 percent per annum, increasingly becoming critical to the development trajectory of the country, the CII and KPMG said in a joint report on Wednesday.
“India has pride of place as the fastest-growing services sector nation globally. To keep the momentum going, it is critical that stakeholders, investors and policy-makers are best equipped in strategising for the future and tapping the best markets globally,” said KPMG consumer markets head Rajat Wahi in a statement.
According to the report, ‘The Indian Services Sector: Poised for global ascendancy’ launched on Wednesday at the second edition of Global Exhibition on Services (GES), the services sector contributed 61 percent to India’s GDP in fiscal 2014-15.
“India’s share in global services exports was 3.2 percent in 2014-15, double that of its merchandise exports in global merchandise exports at 1.7 percent, placing India in the eighth place currently amongst the top ten exporters of service in the world,” said the statement.
Providing a wide ranging view of the state of services in India, the report shed light on performance, exports, government initiatives, future and expectations of key services sectors like IT, telecom, tourism, media and entertainment, healthcare, management consulting, logistics and professional services.
Employing more than 3.7 million people, Information Technology – Business Process Management (IT – BPM) is the largest private sector employer. Excluding e-commerce, it is projected to grow at 8.5 percent in 2015-16 from $132 billion to $143 billion, said the statement.
Interestingly, tourism sector is expected to contribute $259 billion to India’s GDP by 2025 while healthcare sector is forecast to chip in with $160 billion by 2017.
“With the launch of the ‘Digital India’ initiative, the government is stepping towards digital empowerment. India is expected to be a leader in IT use in healthcare (e-health) by 2019. Indian telemedicine, though in its nascent stage, is showing robust growth at approximately 20 percent, and is projected to grow from $8 million in 2012 to approximately $19 million by 2017,” said the statement.
Similarly, Indian logistic market valued at $123 billion in 2015 is poised to grow to $160 billion by 2018 at a CAGR of nine percent while Education sector at $46.7 billion in 2014 has ample scope for service export in higher education, attracting foreign students as well.
Pegged at $17.1 billion in 2014, media and entertainment is set to grow at a rate of 14 percent annually until 2019 to reach $33 billion.
“The sector is the 14th largest in the world, and contributes about 1.7 per cent to the country’s GDP. There is a gamut of high quality services available at flexible pricing options in the industry, with some of the major services being content production, animation, game development, post production and VFX, and digital advertising,” said the statement.
Other services sectors with noteworthy contribution in the report included accounting and auditing, architecture and engineering, management consultancy, legal, maintenance repair and overhaul (MRO) and space.