The tertiary sector is different from the primary and secondary sectors in several ways. After primary and secondary, there is a third category of activities that falls under the tertiary sector. These activities are different because they do not produce a good by themselves. Instead, they are an aid or a support for the production process.

These activities help in the development of the primary and secondary sectors. For example, goods that are produced in the primary or secondary sector would need to be transported by trucks or trains and then sold in wholesale and retail shops. At times, it may be necessary to store these in godowns.

Since these activities generate services rather than goods, the tertiary sector is also called the service sector. Transport, storage, communication, banking, and trade are some examples of tertiary activities. We may also need to talk to others over telephone or send letters (communication) or borrow money from banks (banking) to help production and trade.

Other examples include hospitals, educational institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporations, defence, and insurance companies. These can be considered as basic services required in any country. In a developing country, the government has to take responsibility for the provision of these services.

The rising importance of the tertiary sector is evident from the fact that between 1977–78 and 2017–18, production increased the most in this sector. By 2017–18, the tertiary sector emerged as the largest producing sector in India, replacing the primary sector.