Report: India's services sector offers 'historic chance' for investors.

According to Axis Mutual Fund’s report, “Scaling New Heights – India’s Service Sector Report,” India's services sector accounted for 55% of the nation’s Gross Domestic Product (GDP) in FY25, an increase from 40% in the early 1990s, establishing it as a vital engine of wealth generation. The industry is pivotal to India's goal of achieving a Rs. A 4,28,35,000 crore (US$ 5 trillion) economy presents a significant opportunity for investors, both domestic and international. From FY23 to FY25, the sector experienced an average annual growth rate of 8.3%, with sub-sectors such as information technology (IT), financial services, healthcare, telecommunications, and e-commerce showing rapid progress driven by digitalisation, increasing incomes, and urbanisation. IT services are projected to increase by 4–6% in FY26, fueled by the implementation of generative artificial intelligence (AI) and cloud technology. Financial services are undergoing a significant digital transformation, with mutual fund assets increasing at a compound annual growth rate (CAGR) of over 20% over the past ten years. In March 2025, healthcare experienced a 62% year-over-year increase, driven by higher demand and the incorporation of technology. The growth of Indian e-commerce is estimated to rise from Rs. 8,82,401 crore (US$ 103 billion) for 2024 to Rs. 27,84,275 crore (US$ 325 billion) by the year 2030. The services sector received the largest portion of foreign investments in FY25, accounting for 19% of the overall total. Investment options encompass sector-focused mutual funds, shares in IT, banking, telecom, healthcare, and burgeoning sectors such as fintech, medtech, and high-end services.