ABSTRACT
This chapter draws our attention towards the most vibrant and fastest growing services sector. One very significant feature of the structural transformation in the services sector revolution in India has been the remarkable growth of skill-intensive and high value-added sectors. Over the last two decades the Information Technology (IT) and Information Technology–Enabled Services (ITES) has been the key driver of the services sector growth of India. We observe a steady increasing trend in the percentage contribution of the services sector to the GDP since the 1980s. Though the services sector has the tremendous potential generating skilled employment for the educated youth, it is lagging behind the front-runners. India managed to secure the eighth position with regard to the largest exporter of commercial services in the world in 2016 and during the pre-COVID period there was a robust growth in business services exports. As per the latest World Investment Report (2020), of the UNCTAD, India is ranked as the ninth largest FDI recipient in the world. The Government has permitted 100 percent foreign participation in telecommunication services including all services (except insurance) and infrastructure providers, through the Automatic Route. The word which has attracted the highest attention is “outsourcing” which means contracting out business processes (non-core activities) to a third-party organization. Under the GATS rules, mode I is basically the present form of outsourcing of services. Skilled manpower at highly competitive rates, large pool of English-speaking professionally trained IT-ITES personnel, locational time difference, emergence and strengthening of IT infrastructure are the major sources of comparative advantages in this sector.
