services - business opportunities in india: investment ... · the services sector is a key driver...

For updated information, please visit www.ibef.org October 2019

SERVICES

Table of Content

Executive Summary……………….….…….3

Advantage India…………………..….……..4

Market Overview and Trends……….……..6

Strategies Adopted………….……..………13

Growth Drivers and Opportunities…..……15

Industry Associations……….......…………26

Useful Information……….......……………..28

For updated information, please visit www.ibef.orgServices3

The services sector of India remains the engine of growth for India’s economy and contributed 54.17 per cent

of India’s Gross Value Added at current prices in 2018-19*.

At current prices, the sector grew 12.75 per cent year-on-year (in Rs terms) in 2018-19*.

As of 2018, 31.45 per cent of India’s employed population was working in the services sector.

Net export estimate from April to August 2019 in services is US$ 93.82 billion and import is US$ 61.86 billion.

EXECUTIVE SUMMARY

Key Driver of Economic

Growth

A large pool of skilled IT manpower has made India into a global outsourcing hub. It now commands a 55 per

cent share in the global sourcing market.

Further, India is the digital capabilities hub of the world with presence of 75 per cent of global digital talent.

Global Technology Hub

The government’s move to launch ‘Startup India’ aims to create an inclusive ecosystem for entrepreneurs

and push for innovation. Services are a big part of this system. The technology infrastructure required for

such an ecosystem has increased the potential for the sector in India.

Low setup costs make this sector an attractive investment destination

India also has reasonably well-developed financial markets.

All these factors make Indian services sector an attractive ecosystem for both the entrepreneurs and the

investors.

World’s largest hotel operator Marriot will open six properties by end of 2019 and more by 2020.

Attractive Ecosystem

Source: Economic Survey of India, DIPP, MOSPI, RBI, International Labour Organisation

Note: , Updated data on services exports is expected by the end of August 2019 from RBI, *As per second advance estimates

Services

ADVANTAGE INDIA


ADVANTAGE INDIA

India is the export hub for software services. It

has a 55 per cent share in the US$ 185-190

billion global sourcing market in 2017.

India is also becoming a destination for

medical tourism as a result of cheaper but

quality healthcare services.

India has immense potential in tourism

services and earned Rs 1,84,971 crore (US$

28.70 billion) from tourism in 2017-18.

Services sector is the largest recipient of

FDI in India with inflows of US$ 74.94

billion between April 2000 and June 2019.

100 per cent FDI for any regulated

financial sector activity under the

automatic route.

An already established technology base

and infrastructure that will help in the

creation of an ecosystem for other

services.

Large pool of skilled manpower, especially

in the areas of IT & ITeS available at a

relatively low cost and and a rapidly

increasing youth population looking to

migrate from agriculture to other sectors.

Government of India is working to remove

many trade barriers to services and tabled a

draft legal text on Trade Facilitation in

Services to the WTO in 2017.

Government is promoting necessary

services and will charge zero tax for

education and health services under the

GST regime.

The government has identified 12 sectors

under the Champion Services Sectors

Initiative which is aimed at formulating

cross-cutting action plans to promote their

growth.

ADVANTAGE

INDIA

Source: Economic Survey of India 2016-17, DIPP, NASSCOM

Source: WTO- World Trade Organisation

Services

MARKET OVERVIEW

AND TRENDS


SERVICES SECTOR CLASSIFICATION

Source: Indiabudget

Services sector

Road Transport

Trade and Repair

ServicesHotels and

Restaurants

Railways Air Transport

Financial

Services

Real Estate,

ownership of

dwelling and

Professional

Services

Transport,

Storage,

Communication

and

Services

related to

Broadcasting

Public

Administration

and Defence

and Others

Trade, Repair,

Hotels and

restaurants


SHARE OF SERVICES SECTOR GROWS AT THE

FASTEST CAGR

84

6.8

4

84

7.7

6

87

0.2

6

97

6.4

9

1,0

05

.30

1,0

95

.05 1,2

85

.14

1,3

56

.49

36

2.9

4

48.97%50.03%

50.62%51.83%52.33%52.72%

53.50%54.30%

56.19%

30%

35%

40%

45%

50%

55%

60%

0

200

400

600

800

1,000

1,200

1,400

1,600

FY

12

FY

13

FY

14

FY

15

FY

16**

**

FY

17**

*

FY

18**

FY

19*

FY

20 Q

1 *

Growth of India's Services Sector (GVA at basic price)

Services sector GVA as a percentage of total GVA (in Rs terms)

Source: IMF, World Bank, MOSPI

Note: CAGR - Compound Annual Growth Rate, Exchange Rate used is average for the year, ****Third Revised Estimates, ***Second Revised Estimates, **First Revised Estimates, *

Provisional, ^As per World Bank’s World Development Indicators

In terms of overall GDP India ranks 7th in 2018 and was the among

the leaders in services GVA growth in 2017, achieving 7.92^ per cent

growth.

India’s services sector GVA grew at a CAGR of 6.96 per cent to US$

1,356.49 billion in FY19* from US$ 846.84 billion in FY12.

Growth rate of financial, real estate and professional services was

estimated at 12.71 per cent (in Rs terms) in FY19*. Trade, hotels,

transport, communication and services related to broadcasting are

estimated to have recorded 11.63 per cent growth (in Rs terms) in

FY19*.

Visakhapatnam port traffic (million tonnes)Services Sector GVA at basic prices at current prices (in US$

billion)

CAGR 6.96%


SERVICE SECTOR PMI

49

.6 52

.6 54

.2

51

.5

50

.9

52

.2

53

.7

53

.2

52

.2

52

.5

52

.0

51

.0

50

.2

49

.6

53

.8

52

.4

48

.7

0

10

20

30

40

50

60

Ma

y-1

8

Jun

-18

Jul-

18

Au

g-1

8

Se

p-1

8

Oct-

18

Nov-1

8

Dec-1

8

Jan

-19

Fe

b-1

9

Ma

r-1

9

Ap

r-19

Ma

y-1

9

Jun

-19

Jul-

19

Au

g-1

9

Se

p-1

9

Source: IHS Markit

Nikkei India Services PMI (Monthly) The services sector is a key driver of India’s economic growth

Nikkei India Services Purchasing Managers' Index (PMI) stood at

48.70 in September 2019, indicating an expansion

Strong overseas demand and new export business opportunities

helps to boost total sale in country .


PERFORMANCE OF INDIA’S SERVICES SECTOR:

SOME INDICATORS

Source: AAI, TRAI, Economic Survey 2017-18, Ministry of Shipping, Ministry of Tourism, NASSCOM, Directorate General of Shipping

Sector Indicators UnitPeriod

2009-10 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

IT- BPM

IT- BPM service revenues US$ billion 64 106 119 143 154 167 181.0(E)

Exports US$ billion 50 87 98 108 116 126 136.0(E)

Domestic US$ billion 14 19 21 35 38 41 45.0(E)

Aviation

Airline Passengers (Total) Million 77.4 103.8 115.8 135.0 158.4 308.8 204.2(P)

Domestic Million 45.3 60.7 70.1 85.2 103.7 243.3 140.3

International Million 32.1 43.1 45.7 49.8 54.7 65.5 63.9

TelecomTelecom Connections

(wireline and wireless)Million 621.3 933.0 996.1 1,058.9 1,194.6 1,206.2 1776.75

Tourism

Foreign Tourist Arrivals Million 5.2 7.0 7.7 8.0 8.8 10.5 10.6 (P)

Foreign Exchange earnings

from tourismUS$ billion 11.1 18.4 20.2 21.1 22.9 28.8 27.7 (P)

Shipping

Gross tonnage of Indian

shippingMillion GT 9.7 10.5 10.5 10.5 12.0 12.6

12.7 (As of

dec’18)

No. of ships Numbers 998 1,209 1,210 1,251 1,338 1,3841400 (As

of Dec’18)

Ports Port Traffic Million tonnes 850.0 972.46 1,052.23 1,071.76 1,133.69 1208.94 1276.8(P)

Note: NA - Not Available, ** - As of December 2018, , ***between April 2018 - March 2019


INDIA’S SERVICES TRADE

Source: RBI

Services exports are a key driver of India’s growth and India ranked

as the eighth largest exporter of commercial services in the world in

2017.

India’s services exports grew 19.60 per cent year-on-year to US$

195.09 billion during 2017-18P. Services imports rose 22.85 per cent

year-on-year to US$ 117.53 billion during the same period.

Net Services exports from India grew 14.98 per cent year-on-year to

US$ 77.6 billion in 2017-18P.

Exports of travel services witnessed the highest growth, growing

13.59 per cent year-on-year to US$ 20,858.33 million in April-

December 2018(P).

India’s overall exports of services stood at US$ 93.82 billion in April-

August 2019.

Note: G.n.i.e – Government not included elsewhere, P – Provisional, * - Up to December 2018.

Net Exports of Major Services from India (US$ billion)

6.8

2

1.7

2

0.7

1

-0.0

1

70

.06

0.6

9

-0.7

5

1.4

6

8.8

4

-0.1

7

0.8

1

-0.1

3

72

.19

0.7

2

-0.3

7

1.1

44.2

8

-0.7

8

0.7

5

-0.4

6

57

.55

0.8

8

1.0

1

-0.3

8

-10

0

10

20

30

40

50

60

70

80

Tra

ve

l

Tra

nspo

rta

tio

n

Insu

ran

ce

Bu

sin

ess

So

ftw

are

Fin

an

cia

l

Com

mu

nic

ation

G.n

.i.e

2016-17 2017-18P 2018-19*P


Banking and Financial

Services

Tourism and

Hospitality Services

Telecommunication

Services

Healthcare Services

IT and ITeS Services

Aviation Services

KEY PLAYERS

Source: Company websites, TechSci Research

http://www.lifecarehll.com/

http://www.lifecarehll.com/

Services

STRATEGIES

ADOPTED


STRATEGIES ADOPTED

Acquisition - On January 01, 2019, Bandhan Bank Ltd acquired Gruh Finance Ltd through a share swap

ratio deal of 3:5.

Banking and Financial

Services

Acquisition - General Atlantic Partners and TPG voiced intentions to bid jointly for acquiring the healthcare

assets of Fortis for US$ 1.80 billion

Sun Pharmaceuticals launched an ophthalmic solution Cequa, which is used for the treatment of dry eye

disease also commercialised Cequa 0.09 per cent in US.

Apollo Munich Health Insurance acquired by HDFC for Rs 1,347 crores (US$ 0.192 billion).

Healthcare Services

As Educomp has decided to explore this opportunity by offering its various online and supplemental solutions

to help institutions to leverage the most of technology he Indian education industry opens to new innovative

ways of learning.

IIT madras won NTPC Electron National Finale 2019.

Education and Training

Services

Source: Company websites, Media sources, TechSci Research

Players are trying to ensure convenience for their customers by providing all services available on a single

portal. For example, makemytrip.com and a host of other websites provide a comprehensive basket of

offerings which include outbound and inbound travel for leisure and business trips, hotels and car booking,

holiday packages within India or abroad, etc

Players are opting for many channels to maximise sales and ensure convenience for their customers. For

example, Thomas Cook and Kuoni India launched their online portals to compete with others. On the other

hand, makemytrip.com is planning to go for the offline channel to complement its existing portal and has

already launched mobile apps for maximising sales.

Indian LCC’S are looking forward to increase their ancillary services, without tampering their business

models. This includes services like lounge access, priority boarding, customer loyalty memberships and

customer meals

Tourism and Hospitality

Services

To enhance the telecom's customer experience services, Vodafone Idea & TCS extend their old partnership.

Merger - In August 2018, Vodafone India and Idea Cellular merged into Vodafone Idea. As of May 2019,

Vodafone Idea is India’s largest telecom service provider.

Reliance Industries ltd. tie-up with Microsoft’s Azure cloud platform.

Telecommunication

Services

GROWTH DRIVERS

AND OPPORTUNITIES


GROWTH DRIVERS OF SERVICES SECTOR

Source: Ministry of Statistics and Programme Implementation, World Trade Organisation

Note: Exchange Rates used are average of each year, provided on slide 30, *As per second advance estimate

Government of India’s push to financial inclusion has led to increased access to the banking system.

Strong growth in savings in the country have also acted as tailwinds for the banking sector.Growth in Banking

Services Exports have acted as a major growth driver of India’s services sector.

Growth in global exports of commercial services has acted as a catalyst for expansion of India’s services sector

World commercial services exports have increased from US$ 4.15 trillion in 2011 to US$ 5.25 trillion in 2017.

Services Exports

Growth in per capita income has resulted in higher domestic demand for various services such as travel and

tourism, healthcare and telecommunications.

India’s per capita income has increased rapidly from US$ 1,323.50 in 2011-12 to US$ 1,982.65 in 2018-19* and. It

is expected to reach around US$ 6,000 by 2025.

Rise in Per Capita

Income

Low-Cost Carriers have contributed to growth of the sector

Rising traffic from smaller towns and cities is a major growth driver

As per the Union Budget 2019-20, government is aiming for higher foreign direct investment (FDI) in aviation

industry.

Growth in Aviation

Growing tourism infrastructure has led to expansion of the tourism and hospitality sector.

Schemes introduced by Government of India such as Swadesh Darshan Scheme have also contributed to

expansion.

Growth in Tourism

and Hospitality

Rise in affordability of telecommunication services has been a major factor in driving the growth of the sector

Shift of Indian residents from low income to high income groups has also been a contributor.

Growth in

Telecommunication


INDIAN BANKING SECTOR DRIVING GROWTH IN THE

SERVICES SECTOR

47

4.1

8

57

5.7

2 8

01

.79

85

3.3

5

97

0.4

6

1,1

89

.50

1,3

17

.01

1,2

98

.35

1,3

31

.82

1,4

56

.11

1,4

75

.71

1,6

02

.54

1,7

81

.12

1,6

74

.55

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

FY

19

Source: Reserve Bank of India (RBI), TechSci Research ;

Note: CAGR - Compounded Annual Growth Rate, Exchange Rate used is average for the year, ^As per Motilal Oswal, * - CAGR upto FY18

During FY06–18, deposits grew at a CAGR of 11.66 per cent from

US$ 474.18 billion in FY06 to US$ 1,781.12 billion in FY18. As of

September 2018, deposits in the country stood at Rs 120,818.92

billion (US$ 1,674.55 billion).

Access to banking system has also improved over the years due to

persistent government efforts to promote banking-technology and

promote expansion in unbanked and non-metropolitan regions.

At the same time India’s banking sector has remained stable despite

global upheavals, thereby retaining public confidence over the years.

Strong growth in savings amid rising disposable income levels are

the major factors influencing deposit growth.

Opportunity:

• Significant growth possible in private sector lending as credit

disbursal by private sector banks is expected to increase.

• Market share of private banks in advances is expected to

increase from 27.7 per cent in 2017-18 to nearly 35 per cent in

2019-20.^

Visakhapatnam port traffic (million tonnes)Growth in deposits over the past few years (US$ billion) (as of

Dec 2019)

CAGR* 11.66%


AVIATION DRIVING GROWTH IN SERVICES WITH

INCREASING PASSENGER AND FREIGHT TRAFFIC

73

.35

96

.49

11

6.8

7

10

8.8

8

12

3.7

6

14

3.4

3

16

2.3

1

15

9.4

0

16

9.0

3

19

0.1

0

22

3.9

6

26

4.9

7

30

8.7

5

34

4.7

0

14

2.2

6

0

50

100

150

200

250

300

350

400

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

FY

19

FY

20…

Source: Association of Private Airport Operator, Airports Authority of India

Witnessing a growth of 12.64 per cent over the previous year, total passenger traffic stood at a 308.75 million in FY18, which was recorded at

264.97 million in FY17 in India. Passenger and freight traffic during Apr-Aug 2019 reached 142.26 million and 1.42 million tonnes respectively.

Growth in passenger traffic has been strong since the new millennium, especially with rising incomes and low-cost aviation.

Freight traffic on airports in India is expected to cross 11.4 million tonnes by 2032.

Opportunity:

• Passenger traffic arising from small cities and towns is expected to witness rapid growth.

• Total passenger traffic in the country is expected to surpass 855 million by 2030-31.

• Rise in passenger traffic is being complemented by the Regional Connectivity Scheme (RCS) and expansion of airport handling capacity of

India.

Visakhapatnam port traffic (million tonnes)

Notes: CAGR – Compound Annual Growth Rate, FY – Indian Financial Year (April – March)

1.4

0

1.5

5

1.7

2

1.7

0

1.9

6 2.3

5

2.2

8

2.1

9

2.2

8

2.5

3

2.7

0

2.6

8

3.3

6

3.5

6

1.4

2

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

FY

19

FY

2…

Passenger traffic in in India (million)Freight traffic in India (million tonnes)


INCREASING EXPENDITURE ON TRAVEL AND

TOURISM IS A MAJOR DRIVER FOR THE SECTOR

22

.1

24

.4

18

.8

22

.3

25

.5

26

.4

20

.8

17

.8

18

.7

10

.3

11

.6

12

.9

42

.1

46

.2

48

.7 60

.9 69

.3

68

.7 77

.9 90

.2

92

.7

18

0.0

20

1.7

23

4.4

0.0

50.0

100.0

150.0

200.0

250.0

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8E

Business Travel and Tourism Spending (in US$ bn)

Leisure Travel & Tourism Spending (in US$ bn)

Source: World Travel and Tourism Council, Make in India, Global Business Travel Association

The travel and tourism sector forms a major part of the services

industry; thereby increasing expenditure for obtaining this service is

expected to drive growth in the overall services sector.

The share of travel and tourism in India’s GDP was 10.4 per cent in

2018 and is expected to grow to 9.9 per cent in 2028.

Leisure and business travel and tourism spending are expected to

increase to US$ 234.4 billion and US$ 12.9 billion in 2018,

respectively.

Opportunity:

• Presence of world-class hospitals and skilled medical

professionals makes India a preferred destination for medical

tourism.

• India’s earnings from medical tourism could exceed US$ 9 billion

by 2020.

Visakhapatnam port traffic (million tonnes)Travel and tourism spending (US$ billion)

Notes: IT – Information Technology, E – Estimated, Updated data is expected from World Travel and Tourism Council by the end of August 2019


STRONG GROWTH IN HEALTHCARE SERVICE

SECTOR

Source: Frost and Sullivan, LSI Financial Services, Deloitte, TechSci Research

45

51

.7 59

.5 68

.4

72

.8 81

.3

10

4.0

11

0.0

16

0.0

28

0.0

0

50

100

150

200

250

300

2008 2009 2010 2011 2012 2014 2015 2016 2017F2020F

Healthcare has become one of India's largest sectors both in terms

of revenue and employment. The industry is growing at a

tremendous pace owing to its strengthening coverage, services and

increasing expenditure by public as well private players

During 2008-20, the market is expected to record a CAGR of 16.5

per cent

C-CAMP, Department of Biotechnology has signed a contract with

AMR global of Netherlands to work together on antimicrobial

resistance solutions.

By 2023, healthcare industry is expected to reach US$ 132 billion.

The total industry size is expected to touch US$ 160 billion by 2017

and US$ 280 billion by 2020

Indian companies are entering into merger and acquisitions with

domestic and foreign companies to drive growth and gain new

markets.

Opportunity:

• India’s median age of population is expected to increase from

26.7 years in 2015 to 31.4 years in 2030.^

• This increase in median age coupled with rising income levels is

expected to lead to significant growth in demand of healthcare

services.

Visakhapatnam port traffic (million tonnes)Healthcare Sector Growth Trend (US$ Billion)

CAGR: 16.5%

Note: F – Forecast, ^As per UN data


EXPANDING TELECOM SUBSCRIBER BASE

20

5.8

6

30

0.4

9 42

9.7

2

62

1.2

8

84

6.3

2

95

1.3

4

89

8.0

2

84

6.3

2 99

6.0

0

1,0

58

.86

1,1

94

.58

1,2

06

.22

1,1

83

.51

1,1

91

.81

18.3

26.2

37

52.7

70.9

78.7

74.0277.58

79.3883.36

92.9892.84

90.1190.34

0

10

20

30

40

50

60

70

80

90

100

0

200

400

600

800

1,000

1,200

1,400

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

FY

19

FY

20(

till…

Telephone Subscribers (in million) Teledensity (in percentage)

Source: Telecom Regulatory Authority of India, TechSci Research

Note: CAGR - Compound Annual Growth Rate.

India is currently the second largest telecommunication market and

has the 2nd highest number of internet users in the world

India’s telephone subscriber base expanded at a CAGR of 15.69 per

cent during FY07-19, reaching 1,191.81 million in FY19.

Tele-density (defined as the number of telephone connections for

every 100 individuals) in India, increased from 18.3 in FY07 to 90.34

in FY19.

Total telephone subscriber base and tele-density reached 1191.81

million and 90.34 per cent respectively, at the end of August 2019.

Opportunity:

• Internet penetion in India has displayed strong growth over the

past few years, yet India is far behind other economies in terms of

internet penetration.

• Consequently, internet subscriber base of India is expected to

grow from 445.96 million in 2017 to 829 million in 2021.

Visakhapatnam port traffic (million tonnes)Growth in total subscribers


GROWING IT AND IT-ENABLED SERVICES SECTOR

Source: NASSCOM, TechSci Research

2429 32 32 32 34 35 38 41 44

50

59

6976

86

98.5

108

116

126

137

0

20

40

60

80

100

120

140

160

180

200

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

FY

19E

Domestic Export

IT and ITeS sector is the major driver of India’s service sector.

IT BPM industry revenues grew 8.38 per cent year-on-year to US$

181 billion in FY19E from US$ 167 billion in FY18.

By end of 2023, India’s IT and business services sector is expected

to reach US$ 14.3 billion with 8 per cent growth.

The domestic revenue of the IT industry is estimated at US$ 44

billion and export revenue is estimated at US$ 137 billion in FY19E.

Opportunity:

• India has emerged as the digital capability hub if the world,

accounting for nearly 75 per cent of the global digital talent pool.

• As global digital spending increases from US$ 180 billion in 2017

to US$ 310 billion in 2020, Indian IT/ITeS industry will be well

positioned to expand significantly

• The rollout of 5G wireless technology in India is expected to bring

US$10 billion global business to Indian information technology

(IT) services firms during 2019-25.

• India’s digital economy is estimated to reach US$ 1 trillion by

2025.

Visakhapatnam port traffic (million tonnes)Market size of IT industry in India (US$ billion)

Note: E – estimate, IT – Information Technology, E – Estimate


GOVERNMENT POLICIES AND INITIATIVES

SEIS is aimed at promoting export of services from India by providing duty scrip credit for eligible exports.

Under this scheme, a reward of 3 to 5 per cent of net foreign exchange earned is given for Mode 1 and Mode

2 services.

In the Mid term review of FTP 2015-20, SEIS incentives to notified services were increased by 2 per cent.

Services Exports from

India Scheme (SEIS)

Source : Economic Survey 2017, Media sources

Formulation of National Tourism Policy 2015 that would encourage the citizens of India to explore their own

country as well as position the country as a ‘Must See’ destination for global travellers.

National Tourism Policy

2015

The new 2016 National Education Policy (NEP) considers education as an utmost important parameter in the

country. The 2016 NEP majorly focuses on quality of education as well as innovation and research in the

sector.

National Education

Policy, 2016

The Union Cabinet, Government of India, has approved the National Health Policy 2017, which will provide

the policy framework for achieving universal health coverage and delivering quality health care services to all

at an affordable cost.

National Health Policy

2017

The National Digital Communications Policy 2018 envisages three missions:

• Connect India: Creating Robust Digital Communications Infrastructure

• Propel India: Enabling Next Generation Technologies and Services through Investments, Innovation and

IPR generation

• Secure India: Ensuring Sovereignty, Safety and Security of Digital Communications

National Digital

Communications Policy

2018

Note : FTP - Foreign Trade Policy


GOVERNMENT POLICIES AND INITIATIVES

Source : Economic Survey 2017, Media sources

100 per cent FDI is allowed under automatic route in scheduled air transport service, regional air transport

service and domestic scheduled passenger airline.

Approval of 100 per cent FDI in aviation for foreign carriers.

100 per cent FDI is allowed under the automatic route in tourism and hospitality, subject to applicable

regulations and laws.

The Government of India allowed 100 per cent FDI in the education sector through the automatic route since

2002.

For the healthcare sector, 100 per cent FDI is allowed under the automatic route for greenfield projects and for

brownfield project investments, up to 100 per cent FDI is permitted under the government route.

FDI cap in the telecom sector has been increased to 100 per cent from 74 per cent; out of 100 per cent, 49 per

cent will be done through automatic route and the rest will be done through the FIPB approval route.

Government has allowed 100 per cent FDI in the railway sector for approved list of projects.

FDI limit for insurance companies has been raised from 26 per cent to 49 per cent and 100 per cent for

insurance intermediates..

FDI Policy

The GST rates are nil for education and healthcare services; 5 per cent for air transport of passengers in

economy class, transport of goods by rail and vessel, supply of tour operator services (without ITC); 12 per cent

for food and drinks at restaurants without air conditioner, heating system or license to serve liquor, while it is 18

per cent for those having them; 12 per cent for accommodation in hotels, inns, etc for rooms with tariff between

Rs 1000-2500, while it is 18 per cent for those between Rs 2500-7500; 12 per cent for air transport of passengers

in other thane economy class; 28 per cent for entertainment events, cinematograph films, etc, hotels and inns

with room tariff above Rs 7,500.

Goods and Services

Tax (GST)


HIGH FDI INFLOWS INTO THE SECTOR

76.96

39.5037.05

25.12

Services Sector

Computer Software &Hardware

Telecommunications

Constructiondevelopment

Trading

Hotel and Tourism

Information &Broadcasting

Hospital & DiagnosticCentres

Consulatncy Services

Sea Transport

Source: Department of Industrial Policy and Promotion

To ensure that India remains an attractive investment, the

Government has brought about a number of reforms such as the

abolition of the Foreign Investment Promotion Board (FIPB) and the

introduction of composite caps in the FDI policy which permits 100

per cent FDI under automatic route for any financial sector activity

which is regulated by any financial sector regulator.

The services category is the highest recipient of FDI Inflows in India

with total inflow of US$ 76.94 billion during April 2000-June 2019.

Top ten service sectors received US$ 227.94 billion FDI during April

2000-December 2018.

Visakhapatnam port traffic (million tonnes)Total FDI Equity Inflows in the top 10 services sectors during

April 2000 – June 2019 (US$ billion)

Services

INDUSTRY

ASSOCIATIONS


KEY INDUSTRY ASSOCIATIONS

Indian Banks' Association

Address: Aurobindo Marg, Opp. Safdarjung Airport,

New Delhi –110 003

Phone: 91 11 24622495

Fax: 91 11 24629221

E-mail: [email protected], [email protected]

World Trade Centre, 6th Floor

Centre 1 Building,

World Trade Centre Complex,

Cuff Parade, Mumbai - 400 005, India

E-mail: [email protected]

Directorate General of Civil Aviation (DGCA)

Hotel Association of India (HAI)

Address: B-601, Gauri Sadan 5, Hailey Road, New Delhi – 110 001,

India

Tel: 91 11 23358585

Fax: 91 11 23327397

Website: http://www.auspi.in/

Address: B 212–214

Som Dutt Chamber-I,

Bhikaji Cama Place,

New Delhi – 110 066

Phone: 91-11-2617 1110/14

Fax: 91-11-2617 1115

Association of Unified Telecom Service Providers of India

(AUSPI)

National Association of Software and Services Companies

(NASSCOM)

Address: International Youth Centre Teen Murti Marg, Chanakyapuri,

New Delhi – 110 021

Phone: 91 11 2301 0199

Fax: 91 11 2301 5452

E-mail: [email protected].

Services Export Promotion Council (SEPC)

Address: 3rd Floor, 6A/6, NCHF Building, Siri Fort Institutional Area,

August Kranti Marg

New Delhi-110049

Phone: +91 11-41046327-28-29, +91 11-41734632

E-mail: [email protected]

Website: www.servicesepc.org

mailto:[email protected]

http://www.auspi.in/



http://www.servicesepc.org/

Services

USEFUL

INFORMATION


GLOSSARY

CAGR: Compound Annual Growth Rate

FDI: Foreign Direct Investment

FY: Indian Financial Year (April to March)

GOI: Government of India

INR: Indian Rupee

US$: US Dollar

Wherever applicable, numbers have been rounded off to the nearest whole number


EXCHANGE RATES

Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year INR INR Equivalent of one US$

2004–05 44.95

2005–06 44.28

2006–07 45.29

2007–08 40.24

2008–09 45.91

2009–10 47.42

2010–11 45.58

2011–12 47.95

2012–13 54.45

2013–14 60.50

2014-15 61.15

2015-16 65.46

2016-17 67.09

2017-18 64.45

2018-19 69.89

Year INR Equivalent of one US$

2005 44.11

2006 45.33

2007 41.29

2008 43.42

2009 48.35

2010 45.74

2011 46.67

2012 53.49

2013 58.63

2014 61.03

2015 64.15

2016 67.21

2017 65.12

2018 68.36

Source: Reserve Bank of India, Average for the year


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