Service industry is the biggest contributor to Indian GDP comprising of around 55%. It is also one of the biggest recipients of FDI capital and plays a pivotal role in employment generation. Indian service industry includes BFSI, healthcare, education, trade, hospitality, professional services, and numerous other sectors.
Service industry will continue to play a significant in India’s economic growth. As the country stands at a cusp of a digital revolution, marked by the wider availability of low-cost data and handsets, the nature of the service industry is also transforming. Most of the major service industries in India such as healthcare, BFSI, and education is shifting digitally. Young demographics and altered consumer behavior are also fostering an enabling environment for the digitization of services in India.
The Government of India also understands the significance of services as a growth enabler of the overall economy and is has unfolded a host of favorable policies tailor-made for individual sectors.
Indian Service
Industry Analysis
- The Indian healthcare industry is valued at around USD 255 billion and is growing at the rate of ~ 17%. Besides hospitals, other ancillary industries such as diagnostics, telemedicine, medical tourism, health insurance, etc. are also growing at a remarkable pace. India’s cost-effective healthcare has also helped it make a mark on the global medical tourism map. The medical tourism industry in India is valued at ~ USD 9 billion. In 2019, more than 650,000 medical tourists visited India.
- India is home to a large banking system comprising of a vast network of public, private, cooperative, & foreign banks. Collectively the Indian banking system holds assets worth over USD 2.3 trillion. During the subprime crisis which grappled most of the major economies in the world, India largely remained unscathed due to a robust & transparent banking system.
- During Mar 2000- Aug 2020 India’s domestic credit grew steadily at an annual average rate of slightly over 15%. In March 2019, the ratio of the Non-Performing Loan Ratio has come down to 9.1% from 11.2% a year before.
- India has made remarkable progress in terms of financial inclusion. As per the latest report compiled by World Bank, 80% of Indian adults have bank accounts in 2017. This is remarkable progress in comparison to 2014 when the penetration was 53%. Government-sponsored initiatives such as the 3 Years Financial Inclusion Plan (FIP) and Pradhan Mantri Jan Dhan Yojna (PMJDY) also played important role in financial inclusion alongside the provision of easy & adequate credit to Indian household at affordable price.
- India’s education sector is integral to its recent uprising across key economic, social, and human development parameters. The size of India’s education industry is valued at ~ USD 120 billion. It has ~ 40,000 colleges and ~ 1000 universities. A large population with more than half of residents aged below 25 implies that there is much more potential for the growth of the education industry in the country.
- India’s media & entertainment industry is valued at ~ USD 25 billion. India is counted amongst the top 15 music markets in the world and it is also one of the fastest-growing advertising markets in Asia. It has presently ~ 200 million TV sets with an ample headspace for ~ 100 million more. This will give a further boost to the industry. As per government data, the sector has received USD 9 billion of FDI in the last two decades.
Transformation in Indian
Service Industry
Rapid growth in internet penetration and a large young population is resulting in major makeovers in the Indian service industry
- Digital healthcare will move upwards steadily with double-digit growth expected in telemedicine, healthcare analytics, health apps, booking apps, etc.
- OTT platforms such as Netflix, Amazon Prime, Hot star Disney, ZEE5, etc. command a huge fan following in India. It is believed that by 2022, the total users of OTT platforms will reach 500 million in India, growing at a break-neck speed. On average, users are streaming 60-70 mins daily content on OTT channels in India.
- Government push towards digitization, soaring internet & smartphone penetration, and significant changes in consumption behavior are fostering a conducive environment for the growth of online banking in India. In 2020, it is estimated that there around 150 million active net banking users in the country.
- Fintech is set for a bright future in India. In 2020, the Indian fintech space is valued at around ~ 2.5 billion, comprising of more than 5% of the global fintech market. In foreseeable future, it will grow further marked by increasing partnerships between traditional banking and fintech entities. Fintech will also play an important role in financial inclusion in the country and supporting the SME sector with easy credit options.
- Edutech space will continue to grow exponentially with a shift in the educational landscape of India. Online education is expected to cross USD 2 billion by the end of 2021. Conducive government initiatives for digital education, availability of cheap high-speed internet, and demand from rural parts of the country will be some of the major growth drivers.
How India Watch can help
- Our tailor-made research can help international & domestic service companies to make informed business decisions about their growth and expansion in India. India watch can offer customized research that can render a lot of insights into the current market trends, consumer behaviour, pricing strategy, distribution structure, competitive landscape, regulatory framework, & much more.
- On a retainer basis, we can work as your research partner and offer timely data and insights on the technological landscape of India, current market trends, major policy shifts, etc.
- We can offer strategic communication services comprising of white papers, corporate presentations, thematic reports, etc.
- We can offer business feasibility services for new healthcare centres, education institutions, hotels, F&B outlets, etc.
- We can offer a feasibility study and market research services for start-ups in healthcare, Edutech, Fintech space. Our market research can test the feasibility of the product idea, evaluate the target market, and offer pricing insights.
