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For updated information, please visit www.ibef.org August 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, 34.49 per cent of India’s employed population was working in the services sector.
Net export estimate from April to June 2019 in services is US$ 56.18 billion and import is US$ 37.46 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.
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
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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$ 74.14
billion between April 2000 and March
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
For updated information, please visit www.ibef.orgServices7
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
For updated information, please visit www.ibef.orgServices8
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
48.97%50.03%
50.62%51.83%52.33%52.72%
53.50%54.30%
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*
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%
For updated information, please visit www.ibef.orgServices9
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
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
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
53.8 in May 2019, indicating an expansion but fall in June 2019 to
49.6.
Strong overseas demand and new export business opportunities
helps to boost total sale in country .
For updated information, please visit www.ibef.orgServices10
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
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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. India had net service exports of US$
60.25 billion in April-December 2018 (P).
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 in April-June 2019-20* is US$
56.18 billion.
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
For updated information, please visit www.ibef.orgServices12
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
Services
STRATEGIES
ADOPTED
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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
Apollo Munich Health Insurance acquired by HDFC for Rs. 1,347 crores (US$ 0.192 billion).
Healthcare Services
As the Indian education industry opens to new innovative ways of learning, Educomp has decided to explore
this opportunity by offering its various online and supplemental solutions to help institutions to leverage the
most of technology
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
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.
In Rs. 700 crore (US$ 100 million), Reliance Jio Digital Services Ltd (RJDSL) acquired 87 per cent share of
chabox company Haptik Infotech Pvt Ltd.
Telecommunication
Services
GROWTH DRIVERS
AND OPPORTUNITIES
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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
For updated information, please visit www.ibef.orgServices17
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%
For updated information, please visit www.ibef.orgServices18
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
84
.54
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 2019 - June 2019 reached 84.54 million and 0.84 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
0.8
4
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
20…
Passenger traffic in in India (million)Freight traffic in India (million tonnes)
For updated information, please visit www.ibef.orgServices19
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
For updated information, please visit www.ibef.orgServices20
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
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
For updated information, please visit www.ibef.orgServices21
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
86
.63
18.3
26.2
37
52.7
70.9
78.7
74.0277.58
79.3883.36
92.9892.84
90.11
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
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 1,183.51 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 90.11
in FY19.
Total telephone subscriber base and tele-density reached 1186.63
million and 90.11 per cent, respectively, at the end of April 2019.
Opportunity:
• Internet penetration 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
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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.
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
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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
For updated information, please visit www.ibef.orgServices24
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)
For updated information, please visit www.ibef.orgServices25
HIGH FDI INFLOWS INTO THE SECTOR
74.15
37.2432.83
25.05
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$ 74.15 billion during April 2000-March 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 – March 2019 (US$ billion)
Services
INDUSTRY
ASSOCIATIONS
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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
Services
USEFUL
INFORMATION
For updated information, please visit www.ibef.orgServices29
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$: US Dollar
Wherever applicable, numbers have been rounded off to the nearest whole number
For updated information, please visit www.ibef.orgServices30
EXCHANGE RATES
Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)
Year INR INR Equivalent of one US$
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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