Economic Survey 2025–26: Service Sector Contribute Over 50% of GVA, Employ Nearly Two-Fifths of Workforce

ENA Economy 2026-01-29 16:57:27 New Delhi, Jan 29 (KNN) Indias services sector has moved beyond post-pandemic stability and is now entering a phase of deeper expansion and diversification, according to the Economic Survey 2025 26 tabled in Parliament on Thursday. The sector contributes over 50 per cent of Gross Value Added (GVA) and accounts for nearly two-fifths of total employment, making it the largest contributor to both output and jobs in the country. Growth Trends and Economic Contribution The Survey notes that services have grown at an average annual rate of around 7.5 per cent since 2000, showing greater resilience compared to agriculture and manufacturing. During FY24 and FY25, the sector remained the fastest-growing component of the economy, supported by strong domestic demand, urban consumption, and rising digital adoption. Services Exports Strengthen External Position Indias services exports continue to play a critical role in cushioning the economy against global trade volatility. The Survey highlights that Indias share in global services exports has more than doubled—from about 2 per cent in 2005 to over 4 per cent in 2024. Information technology services, business process management, financial services, and professional consulting remain the key drivers of export growth. Tourism and Medical Services Gain Momentum Travel and tourism recorded a strong recovery, contributing over 5 per cent to GDP and supporting more than 8 crore jobs in FY24. Foreign exchange earnings from tourism rose steadily, aided by increased international arrivals and domestic travel. Medical and wellness tourism emerged as a fast-growing segment, with patient inflows growing at a double-digit annual rate over the past decade. The Survey estimates the medical tourism market to exceed USD 16 billion by 2030, supported by cost competitiveness and improving healthcare infrastructure. Digital Services and New Opportunities The Survey points to digital public infrastructure—such as Aadhaar, UPI, and the Open Network for Digital Commerce (ONDC)—as a key enabler of service sector expansion. Digitally delivered services, fintech, logistics, and e-commerce are helping small firms and startups access wider markets, improve efficiency, and formalise operations. Challenges and Policy Priorities Despite strong growth, the Survey flags concerns around skill mismatches, uneven productivity, and rising global competition. It calls for sustained investment in skilling, regulatory reforms, urban infrastructure, and data governance to ensure that Indias services sector remains globally competitive and inclusive. (KNN Bureau) 44933 https://knnindia.co.in/news/newsdetails/economy/economic-survey-202526-service-sector-contribute-over-50-of-gva-employ-nearly-two-fifths-of-workforce 2026-01-29 16:57:27 knnindia.co.in Economic Survey 2025–26: Service Sector Contribute Over 50% of GVA, Employ Nearly Two-Fifths of Workforce