India’s services sector growth has been geographically uneven, with southern states emerging as major service-driven economies compared to the rest of the country, according to a new report by NITI Aayog. The report, titled “India’s Services Sector: Insights from GVA Trends and State-Level Dynamics”, released on Tuesday, highlights that Karnataka, Maharashtra, Tamil Nadu, and Telangana have built globally competitive hubs focused on high-value, tradable, and knowledge-based services such as IT, finance, professional services, and digital platforms. Collectively, these four states contributed nearly 40 per cent of India’s total services output in 2023–24. Overall, the services sector accounted for around 55 per cent of India’s gross value added (GVA) in 2024–25, far surpassing the primary sector (16.7 per cent) and the secondary sector (28.8 per cent). It also provided employment to roughly 30 per cent of the country’s workforce, the report notes. GVA represents the value of goods and services produced in an economy after deducting the cost of intermediate inputs. Gross State Value Added (GSVA) is the equivalent measure at the state level. The primary sector refers to agriculture and allied activities, while the secondary sector includes manufacturing. Speaking at the launch, NITI Aayog CEO B.V.R. Subrahmanyam urged states to craft individual strategies to promote service sector growth. “If each state develops its own strategy, there will be no state in India that cannot capitalise on the service sector,” he said. According to the report, states like Gujarat, Chhattisgarh, and Madhya Pradesh—traditionally strong in manufacturing—show relatively lower service-sector development. In contrast, Odisha and Assam recorded a decline in the share of services in GSVA between 2011–12 and 2023–24, indicating limited diversification away from agriculture and extractive industries. Odisha’s services share fell from 38.5 per cent to 34.9 per cent, while Assam’s dropped from 46.5 per cent to 34.3 per cent. Conversely, smaller north-eastern states such as Meghalaya, Manipur, and Nagaland registered significant gains in their service-sector contributions, fuelled by growth in public services, health, education, and infrastructure under central government schemes. Meghalaya’s share rose from 44.7 per cent to 63.2 per cent, while Manipur’s increased from 64.8 per cent to 72 per cent, illustrating how policy focus and public investment can transform regional service economies. A distinctive outlier is Bihar, which, despite having the lowest per capita income, maintains a relatively high services share of 58 per cent. The report suggests that this is driven largely by lower-productivity, informal segments. Traditional services such as trade and repair contribute 27.8 per cent to Bihar’s GSVA, followed by other services, including education and community services, at 20 per cent.