Overview

Overview

Background Note: Global Exhibition on Services Importance of Services

Importance of Services Sector to Indian Economy

India has emerged as the fastest growing major economy in the world and in the view of global analysts, India’s leading position in economic growth is likely to continue for the next two-three decade. Needless to say, one of the major forces or key drivers of this growth is the Services Sector, which has been dubbed as the ‘sector of the current millennium’.

The Government of India has initiated a number of schemes for different services like promoting digitalization, tourism and shipping related policies. These coupled with policies like GST and FDI liberalization have brightened the growth prospects for the services sector.

According to Economic Survey (Volume II), the services sector remains the key driver of India’s economic growth, contributing almost 62 per cent of its gross value added growth in 2016-17. The services sector has achieved growth of 7.7 per cent in 2016 and continues to be higher than the other two sectors, agriculture and industry and nearly at the top among the 15 major economies.

Services sector is also a large employer of skilled workforce, accounting for 28.6 per cent of total employment in India.

Globally, among top 15 nations, in the period 2001-15, the highest increase in services share to GVA was recorded by China (8.9 pp), followed by Spain (8.1 pp) India (7.6 pp) and Russia (7.6 pp). However, during the period 2010-15, the highest compound annual growth rate (CAGR) was achieved by India at 8.5 per cent, closely followed by China at 8.4 per cent.

In 2015 as in 2014, services GVA growth rate (at constant prices), was 2.6 per cent for the world, while for India it was the highest both in 2014 and 2015 at 10.2 per cent and 9.0 per cent followed by China at 7.9 per cent and 8.3 per cent respectively.

Services Sector’s Contribution to State Economy

According to Economic Survey (Volume II), among 32 States/UTs, the services sector is the dominant sector contributing more than half of the gross state value added (GSVA) in 16 states and UTs and more than 40 per cent in all states. The major services in most of the states are trade, hotels and restaurants, followed by real estate, ownership of dwellings and business services. Chandigarh is at the top in terms of share of services GSVA at 88.4 per cent, while Jharkhand is at the top in terms of services GSVA growth at 16.4 per cent.

Foreign Direct Investment in India’s Services Sector

The combined FDI share of the top 10 service sectors such as financial and non-financial services, falling under the Department of Industrial Policy & Promotion (DIPP)’s services sector definition, is 55.3 per cent of the cumulative FDI equity inflows during the period April 2000 - March 2017 and 60.7 per cent of FDI equity inflows during 2016-17. If the shares of another five services or service-related sectors like retail trading, agriculture services, education, ports and air transport are included, then the total share of FDI equity inflows to the services sector would increase to 57.4 per cent and 62.4 per cent respectively for the above two periods. There has been a significant growth in FDI equity inflows in 2014-15 and 2015-16 to the services sector (67.3 per cent and 64.3 per cent for top 15 services). In 2016-17, the growth rate of FDI equity inflows to the services sector (top 15 services) grew by 1.5 per cent to US$ 27.2 billion.

India’s Services Trade - Export & Import

India’s services exports have emerged as a key engine of growth over the last fifteen years. India’s services exports increased from $52 billion in 2005 to $155 billion in 2015, with a share of 3.3% in global services exports. As per Economic Survey (Volume II) estimates, in 2016-17, services exports recorded a growth of 5.7 per cent with pick up in some major sectors like transportation, business services and financial services; and good growth in travel. With a significant rise in foreign tourist arrivals, travel receipts, accounting for more than 14.2 per cent of services exports, witnessed a growth of 9.3 per cent in 2016-17 compared to 4.6 per cent in the previous year. Transportation services exports increased by 13.2 per cent in 2016-17 as against a decline of 19.9 per cent in 2015-16 reflecting the improving merchandise trade activity.

Business services exports recorded a higher growth of 13.6 per cent compared to 2 per cent in the previous year and financial services exports increased by 3.1 per cent as against a decline of 12.7 per cent in the previous year. However, software services exports, accounting for around 45.2 per cent of total services, declined though marginally by 0.7 per cent as domestic software companies faced pricing pressure on traditional services and a challenging global business environment.

India’s services imports registered higher growth of 13.0 per cent in 2016-17 with higher payments for two major services, travel services and miscellaneous services category mainly financial services and software. In 2016-17, despite a growth of 5.7 per cent in services exports, relatively higher growth in services imports led to a decline in net services receipts by 3.2 per cent. Net services surplus financed around 60 per cent of India’s merchandise trade deficit.

Government Reforms to Promote Services Sector

In the last three years, the Government has undertaken a number of reforms to ensure that India remains an increasingly attractive investment destination. The scale of reforms can be gauged from the fact that during this period, 21 sectors also including services activities and covering 87 areas of FDI policy have undergone reforms. FDI policy provisions were radically overhauled across sectors such as construction development, broadcasting, retail trading, air transport, insurance and pension. Besides, initiatives were taken such as the introduction of composite caps in the FDI policy permitting 100 per cent FDI in retail trading of food products with unqualified condition that such food products have to be manufactured and/or produced in India, 100 per cent FDI under automatic route for any financial sector activity which is regulated by any financial sector regulator and above all the recent measure of abolition of the Foreign Investment Promotion Board (FIPB).

Role of Services in ‘Make in India’ - Embedded Services

There are sectors where a lot of complementarily exists between services and manufacturing growth e.g. telecom services and telecom equipment manufacturing, electronic hardware & software where a hardware-software combination can accelerate growth of both hardware and software. Other services include healthcare and pharmaceutical sector, shipbuilding along with ship repair & maintenance services, R&D services, biotech, etc. Efficient, reliable and reasonable transport, distribution, finance, utilities, telecommunications and business services are essential for cost effective production and marketing of goods. Given the multifaceted contribution of services to national economy and trade, it is critically important to design and implement a services-driven development strategy within a coherent and comprehensive policy framework, since a robust services sector can act as a huge catalyst for Make in India and aid in the ease of doing business.

Contribution of Services to Employment Through Skilling

The services sector can play a key role in creating highly skilled and more productive job opportunities. As India moves progressively towards becoming a 'knowledge economy' it becomes increasingly important for the country to focus on advancement of skills which are relevant to the emerging economic environment where the services sector plays a dynamic role. The workforce must have education and training that equips and leverages the labour intensive economy. A large number of services sectors like tourism, M&E, retail, etc require workforce across skillsets and is highly employment intensive.

Global Exhibition on Services: A platform to promote India’s Services Sector

Dubbed as the ‘sector of the current millennium’, services sector drives the Indian economy in an inclusive and equitable manner. In a challenging global environment, services trade is increasingly viewed as an instrument to create jobs, drive national growth and foster exchange of ideas, knowledge and technology. Accounting for half of global trade in value-added terms, the services sector also contributes significantly to trade in goods including through supply chains and e-commerce.

With an aim to engage Industry and Governments across the world to promote greater exchange of trade in services between India and rest of the world, the Department of Commerce, Ministry of Commerce and Industry, Government of India, in association with Services Export Promotion Council (SEPC) and Confederation of Indian Industry (Cll) created a dedicated platform, the Global Exhibition on Services (GES) in 2015, with an attempt to give the multifaceted Indian services the global visibility they deserve and to simultaneously encourage trade in services at a global level.

GES as an annual event that seeks to enhance strategic cooperation and develop synergies to strengthen multilateral relationships between all stakeholders, tap the potential for services' exports and increase FDI inflow.

GES 2015 was inaugurated by Hon’ble Prime Minister of India, Shri Narendra Modi, at Pragati Maidan New Delhi. 

GES in subsequent years have scaled new heights in taking our services to the global market place an in showcasing the India Opportunity. As a dynamic player in the global services sector, India has the potential to build its own brand for services exports where it can be a dominant player and GES furthers the cause of:

  • Showcasing India’s prowess across services sectors before a global audience
  • Position India globally in more services sub-sectors
  • Generate concrete business outcomes
  • Create employment through leveraging services exports 

Stepping in its 4th year, GES is today considered a global platform for increasing trade in services, enhancing strategic cooperation and strengthening multilateral relationships between stakeholders from India and overseas.

As a part of GES, a large number of seminars/knowledge sessions are organized on diverse topics where expert industry leaders and government representatives deliberates on the various issues facing the services sectors. Many of these explored opportunities in specific geographies like Africa, Gulf region, Australia, and SAARC. Others focused on specific service sectors like Tourism and Culture, Exhibitions & Event Services, Banking & Financial Services, Media & Entertainment, Heath & Medical Value Travel, MSMEs in services and on Education and Skills connecting India to the world.

Global Exhibition on Services: 2018

The Global Exhibition on Services 2018 is being organized by the Department of Commerce, Ministry of Commerce and Industry, Government of India in partnership with Government of Maharashtra, Services Export Promotion Council (SEPC) and Confederation of Indian Industry (CII) to promote trade in services.

Highlights of GES 2018:

· GES 2018 Stamp Release

· 40 Knowledge Sessions

· Exclusive CEO’s Session post Inaugural

· Participation of Head of State of Foreign Country

· Fam tours & Learning Journeys

· Large number of partner state

· Release of Services Report

· Bollywood inspired Night

· Cruise Dinner

· Artisans Gully

 22 FOCUS SECTORS:

  • Banking and Financial Services
  • Education
  • Energy Services
  • Environmental Services
  • Exhibition and Event Services
  • Facility Management
  • Healthcare
  • IT and Telecom
  • Logistics 
  • Media and Entertainment
  • Next Gen Cities
  • Professional Services 
  • Railway Services
  • Retail and E-Commerce
  • Skills 
  • Space 
  • Sports Services 
  • Start Ups/SME in Services 
  • Tourism and Hospitality 
  • Wellness
  • Print & Publishing 

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