What is service Industry?
This is the portion of the economy involved in the provision of services
to other businesses as well as final consumers.
This includes a wide range of businesses including financial
institutions, schools, transports and restaurants.
Also known as "tertiary sector of industry"
Various sectors that combine
together to constitute service
•Hotels and Restaurants
•Other Transport & Storage
•Dwellings, Real Estate
Service Sector - History
GDP Share of Service Sector
• China – 34%
• India – 42%
• Brazil – 48 %
• China – 40%
• India – 54%
• Brazil – 59 %
GDP shares of service sector in
India China and Brazil
Contribution of Industry to GDP in
Contribution of Industry to GDP India
Contribution of Industry to GDP Brazil
in year 2010
The employment share of India and Brazil’s service sector
has grown very slowly according to available statistics
covering the period of 1990-2010.
The employment share of China’s service sector has been
growing steadily since 1990 -2010.
As a result, China’s service sector has fascinated relatively
much more labour force than India and Brazil since the mid-
In terms of creating new jobs, services have played a vital
role in these economies.
Growth of service Sector
The structure of the service sector in India, China and Brazil are very
It is still dominated by the traditional or old services, followed by
business services (finance, insurance and real estate) and transport and
The new service sectors are catching up rapidly During 1999-2003,
communication services achieved the strongest growth in these countries
with a average annual rate of
23.89 % in India,
16.77 % in China
18% in Brazil.
•Output shares of the service sector in India, China and Brazil
have grown steadily since 1996.
•The role of services in the Indian and Brazilin economy is clearly
more significant than that of services in the Chinese economy.
•Since 1990, India and Brazil’s service sector has grown faster
with an annual rate of 7.5 % and than the manufacturing sector
with an annual rate of 6.0 %
Service Sector In India
•India stands out for the size and dynamism of its services
•The contribution of the services sector to the Indian
economy is 55.2 per cent share in gross domestic product
•Growing by 10 per cent annually, contributing to about a
quarter of total employment, accounting for a high share
in foreign direct investment (FDI) inflows and over one-
third of total exports
•27.4 per cent export growth through the first half of
•In India, service sector has become a dominant
contributor, such that the success in this regard has
been called as
‘India’s services revolution’.
•The Indian economy is the second fastest major
growing economy in the whole world with the
growing rate of the GDP at 9.4% in 2006- 2007. The
economy of India is the twelth biggest in the world for
it has the GDP of US$ 1.09 trillion in 2007.
• Contribution of service sector in GDP has increased
• Foreign investors have shown interest in Indian export due
to highly skilled, low cost and educated workers
• This has made sure that services provided by India are of
• Foreign companies mainly started outsourcing business
services from India such as business process outsourcing and
• which in its turn has made the sector contribute more to the
•Role of services in these economies has been rising with
China starting on a lower base.
•Growth has mainly been driven by increasing specialization
of production, rising standard of living and accelerated
urbanization in these societies.
•India’s service sector is the dominant contributor to
GDP growth but employment absorption is not very
high in this sector.
•China’s service sector is lagging behind.
•Brazil also doing good in Service Sector