Introduction
India’s services sector continues to remain a key driver of the country’s economic growth. Its share in Gross Value Added (GVA) reached a historic high of 56.4% in FY26, according to the First Advance Estimates, compared with 50.6% in FY14. The sector has demonstrated sustained resilience and strong growth momentum, recording an estimated growth of 9.1% in FY26, compared with 7.2% in FY25, highlighting its increasing importance in India’s economic expansion and structural transformation. Growth has been supported by financial, professional and technology-enabled services, alongside emerging opportunities in areas such as tourism, data centres and media. The sector also remains a major source of employment, accounting for 61.9% of urban employment and 51.7% of net formal employment additions during the first part of FY26.
India's industry-wise share of total services sector exports (FY25)
Source: Reserve Bank of India (RBI)
India is the fifth-largest recipient of FDI inflows with the services sector being the highest FDI recipients in the country. From April 2000-March 2026, the sector’s FDI inflows were US$ 128.85 billion, accounting for over 16% of the country’s total FDI inflows.
Export Trend
Indian services exports (US$ billion)
Source: Ministry of Commerce
India's economy is largely dependent on the services exports. The country exports various services, namely, travel, transportation, insurance, software, IT-BPM, business services, financial services, and communication, etc.
India has also strengthened its position in the global services ecosystem, ranking 7th globally with a 4.3% share in world services exports. Services exports reached an all-time high of Rs. 33.51 lakh crore (US$ 387.6 billion) in FY25, registering growth of 13.6%. The momentum continued in FY26, with services exports reaching Rs. 37.23 lakh crore (US$ 421.3 billion), compared with Rs. 33.51 lakh crore (US$ 387.6 billion) in FY25. The sector’s continued expansion is supported by India’s strengths in telecom and IT services, business and professional services, Global Capability Centres (GCCs), and digitally delivered services, alongside improvements in digital and physical infrastructure and connectivity.
These developments underscore the growing significance of India’s services sector in both domestic economic growth and international markets. March 2026 services exports were estimated at Rs. 3.11 lakh crore (US$ 35.20 billion), compared with Rs. 3.08 lakh crore (US$ 35.63 billion) in March 202, the growth declined slightly year-on-year. The continued growth underscores the resilience of India’s services sector and its increasing contribution to external trade, supported by strong performance in technology-led and knowledge-intensive service segments.
Export Destinations
India's services exports have a broad global presence, supported by strong capabilities in technology, business, professional and digitally delivered services. Services exports reached Rs. 37.23 lakh crore (US$ 421.3 billion) in FY26, with telecommunications, computer and information services and business services emerging as the main drivers. Telecommunications, computer and information services accounted for 49.03% of total services exports, while business services accounted for 29.5%. The United States and Europe continue to be major markets for India's technology and software services. According to the RBI's FY25 survey on computer software and IT-enabled services (ITES) exports, the United States remained India's largest destination for software services, accounting for 52.9% of total software services exports, followed by Europe with a 32.8% share. Within Europe, the United Kingdom was the largest individual destination.
Country-wise breakdown of India's Software Services Exports (FY25)
Source: Reserve Bank of India (RBI)
India's IT industry also continues to have a strong presence across its traditional overseas markets. According to NASSCOM, the USA, UK and European Union together accounted for around 90% of India's IT industry exports in FY25, while Indian companies are increasingly exploring opportunities across Asia-Pacific, Latin America, the Middle East, Japan, China and Africa.
Government Initiatives
Software Technology Park (STP) Scheme
The STP scheme is provided for the promotion of software exports from India. Under this scheme provides several benefits such as a single-window clearance, 100% foreign equity, exemption from payment of duty of customs, refund on GST on capital goods procurement from DTA and import of second-hand capital goods.
Digital India Internship Scheme
The Digital India Internship Scheme was launched by the Ministry of Electronics and Information Technology (MeitY). The objective of this scheme is to provide a first-hand experience to students under the guidance of experienced and qualified mentors. The internship will cover cyber law, digital forensics, semiconductors and nanoelectronics technology, digital literacy, digital payments and economy, information services management systems, etc.
PhD Scheme
The Visvesvaraya PhD Scheme for Electronics and IT, initiated by the Ministry of Electronics and Information Technology (MeitY) in 2014, aims to increase the number of PhDs and strengthen research and innovation in the Electronics System Design and Manufacturing (ESDM) and IT/IT-enabled Services (IT/ITES) sectors in India. Phase I of the scheme was implemented with an outlay of Rs. 466 crore (US$ 76.22 million). As of April 30, 2025, 943 PhD candidates had completed their PhDs, 58 candidates had submitted their theses and 159 candidates were pursuing their PhDs, while 158 Young Faculty Research Fellowships had been supported. The scheme had also resulted in 5,750 publications and 90 patents.
Phase II, launched in 2021 for a nine-year period, has a total estimated cost of Rs. 482.53 crore (US$ 64.84 million). The scheme aims to support 1,000 full-time PhD candidates, 150 part-time PhD candidates, 50 Young Faculty Research Fellowships and 225 Post-Doctoral Fellowships. According to the latest information available from MeitY, 1,000 full-time and 153 part-time PhD seats have been allotted to eligible institutions, along with 125 Post-Doctoral Fellowship seats, while 11 Young Faculty Research Fellowships have been awarded.
Government Bodies
Service Export Promotion Council (SEPC)
The Ministry of Commerce and Industry set up the SEPC. It is the apex body for the trade-related activities of services sectors. It acts as an advisory to the government of India in terms of regulations and policy and acts as a liaison between the industry and the government. It also works towards trade intelligence generation, export development of services industries, promotion and enabling business environment.
Ministry of Electronics and Information Technology (MeitY)
The MeitY is an apex agency of the Union Government of India. The ministry's objective is to provide e-infrastructure to the government, promote electronics hardware and the IT-ITeS industry, implement an R&D framework, and provide support to e-skills and knowledge networks. The functions of MeitY are promoting digital transactions and payments, promoting IT education, handling cyber law matters, undertaking development initiatives, etc.
FAQs
Telecommunications, computer and information services led service export in FY26, accounting for 49.03% of total services exports. Business services followed closely at 29.5%, together driving the bulk of India's service industry export earnings.
India's service export reached Rs. 37.23 lakh crore (US$ 421.3 billion) in FY26, up from Rs. 33.51 lakh crore (US$ 387.6 billion) in FY25, registering 8% year-on-year growth. The service industry's share in GVA also hit a historic high of 56.4% in FY26.
The USA remains the largest destination for India's software service export, accounting for 52.9% of total software services exports, followed by Europe at 32.8%. The USA, UK and EU together account for around 90% of India's IT industry exports.
IT and business services exports form the backbone of India's services sector, with telecommunications and computer services alone contributing 49.03% of total service export. This technology-led strength continues to drive the service industry's global competitiveness.
Global Capability Centres are among the key strengths supporting India's services sector expansion, alongside telecom and IT services. These centres are reinforcing India's position in digitally delivered service export globally.
Digitally delivered services, supported by improvements in digital and physical infrastructure, are expanding India's service export footprint. This digital strength is central to India's services sector maintaining its 4.3% share in world services exports.
The Software Technology Park Scheme supports software export through single-window clearance and customs duty exemptions. The Visvesvaraya PhD Scheme, with a Phase II outlay of Rs. 482.53 crore (US$ 64.84 million), strengthens research capacity underpinning the service industry.
Emerging segments like tourism, data centres and media are adding new dimensions to India's service export basket. These areas, alongside traditional IT and business services, are strengthening the overall competitiveness of India's services sector.
India ranks 7th globally with a 4.3% share in world services exports, with Indian companies increasingly exploring Asia-Pacific, Latin America, the Middle East and Africa. This diversification is expanding the global footprint of India's service industry.
With FY26 growth of 9.1% and service export reaching US$ 421.3 billion, India's services sector outlook remains strong. Continued strength in IT, business services and digitally delivered services is expected to sustain robust service export growth ahead.
SERVICES EXPORT PROMOTION COUNCIL
Head Office: DPT - 417, 4th Floor, Prime Towers,
Plot No. 79 & 80, Pocket - F,
Okhla Industrial Area Phase - I,
New Delhi-110020
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Tel.:+91-11-43562656
Email: info@servicesepc.org
Website: http://servicesepc.org
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