India’s Booming Service Sector Drives Push Toward $5 Trillion Economy
Delhi/Hyderabad, July 7 (Maxim News): India’s service sector is rapidly emerging as the engine of growth in the country’s ambitious drive toward becoming a $5 trillion economy, according to a new report released on Monday by Axis Mutual Fund.
The report highlights how the service sector’s contribution to India’s economy has surged from 40% in the early 1990s to an estimated 55% of Gross Value Added (GVA) in FY25, solidifying its role as the backbone of economic progress.
“From IT and telecom to healthcare, BFSI, and e-commerce, all major service segments have witnessed double-digit growth, transforming India’s economic landscape over the last two decades,” the report noted.
Sectoral Growth Highlights
- IT Services: Grew from $8 billion in 2000 to $245 billion in FY24, with projections hitting $300 billion by FY26.
- Banking & Financial Services (BFSI): Driven by digital innovation, mutual fund assets under management (AUM) have grown at 20% CAGR, reaching ₹72.19 lakh crore in May 2025.
- Healthcare: Market size expected to hit $370 billion by 2027, with a staggering 62% year-on-year growth as of March 2025.
- Telecom: Data consumption per user has soared 450x since 2014, touching 28 GB/month in 2025.
- E-commerce: Forecast to triple from $103 billion in 2024 to $325 billion by 2030.
Strong Economic Foundation
India’s nominal GDP has doubled between 2015 and 2025. As of FY25, it stands close to $3.97 trillion, with projections nearing $4.19 trillion by year-end. This robust economic base is creating an enabling environment for further expansion in the services sector.
“The service sector has been instrumental in driving both domestic consumption and foreign investment. Its dominance will be crucial to achieving India’s $5 trillion GDP vision,” the report emphasized.
Key Enablers of Growth
The growth momentum is supported by:
- Digital India initiative and widespread internet penetration
- Ease of Doing Business reforms
- Liberalized FDI policies
- Sector-specific government incentives
Together, these have created a conducive ecosystem for startups, global investors, and domestic enterprises in service-related industries.
Next Story:
Aster DM Merger Gets NCLT Nod For Shareholder Meetings
![Aster DM Merger Gets NCLT Nod For Shareholder Meetings]()
Aster DM merger with Quality Care India advances after NCLT nod to convene shareholder meetings, moving closer to completion by Q1 FY2026-27.
Youth Employment Priority In Telangana: Shabbir Ali
![Youth Employment Priority In Telangana: Shabbir Ali]()
Telangana prioritises youth employment through AI and technical skill development, empowering ITI and polytechnic students for national and global jobs.
We Will Liberate Iran: European Parliament Statement
![We Will Liberate Iran: European Parliament Statement]()
Tehran/Delhi/Hyderabad, Jan 23 (Maxim News): The European Union (EU) has taken a tough stance on Iran. The EU has come out in support of the Iranian people, indirectly mentioning Iran’s Supreme Leader Ayatollah Ali Khamenei, saying that Iran will be given freedom and will face repression. The warnings from the EU to Iran have gained…
Phone Tapping Case: SIT Issues Clarification After KTR Examination
![Phone Tapping Case: SIT Issues Clarification After KTR Examination]()
Phone tapping case probe continues as SIT clarifies KTR examination and warns against misinformation, says Hyderabad Police.
Phone Tapping Case: SIT Completes Seven Hour Questioning of KTR
![Phone Tapping Case: SIT Completes Seven Hour Questioning of KTR]()
Phone tapping case probe intensifies as SIT questions BRS leader KTR for seven hours at Jubilee Hills ACP office in Hyderabad.
Now you can get the latest stories from Indtoday on Telegram every day. Click the link to subscribe. Click to follow Indtoday’s Facebook page, Twitter, and Instagram. For all the latest Hyderabad News update
