India unveiled its first trial Index of Services Production (ISP) in July 2026, marking a significant step in measuring the country's services sector output. The initial data for April 2026 showed robust growth, with 14 out of 19 service sub-sectors posting double-digit year-on-year increases. This new index aims to provide a clearer picture of the services sector, which contributes more than half of India’s economic activity.
Understanding the Index of Services Production
The ISP is designed to be the services sector equivalent of the Index of Industrial Production (IIP), which tracks manufacturing and industrial output. Developed by the Ministry of Statistics & Programme Implementation (MoSPI), the ISP currently covers 19 sub-sectors that represent roughly 60% of the formal services economy. These sectors include trade, hospitality, transport, telecommunications, real estate, IT services, banking, insurance, and professional services.
The index is compiled using a mix of data sources: Goods and Services Tax (GST) returns, administrative records, and the Annual Survey of Incorporated Services Sector Enterprises (ASISSE). For example, administrative data is used for transport sectors like air, rail, and water, as well as banking and insurance, while GST data supports measurements in trade, hospitality, and IT services. The ISP excludes informal sector activities, core government services, and non-market services, focusing on the formal economy.
Key Growth Figures from April 2026
- Accommodation and food services led growth with a 37.2% increase compared to April 2025.
- Retail trade expanded by 30.8%, reflecting strong consumer demand.
- Administrative and support services grew by 28.7%, while real estate rose 27.7%.
- Telecommunications increased by 22.8%, repair services by 19.2%, and road transport by 18.5%.
- Wholesale trade, insurance, IT and computer services, banking, and professional services all recorded growth ranging from 12.2% to 16.5%.
- Some sectors showed slower growth: water transport rose 5.7%, postal and courier services 3.3%, and information and broadcasting 2.5%.
- Railway transport saw a slight decline of 0.4%, and air transport contracted by 13.9%.
Overall, nearly all categories posted positive growth compared to the same month the previous year, highlighting a broad-based recovery and expansion within the services sector.
Why the ISP Matters for India’s Economy
The launch of the ISP is a milestone for India's statistical system, providing policymakers, businesses, and analysts with more timely and detailed insights into the services sector’s performance. Since services account for over half of India’s GDP, having a reliable and comprehensive index helps in understanding economic trends and making informed decisions.
The ISP will initially be released monthly on the 29th, with plans to introduce an overall services production index after further refinement and expanded coverage. This ongoing development will improve the accuracy and scope of data, capturing more of the sector’s diverse activities.
By tracking sub-sector performance, the ISP can identify growth drivers and areas needing support, aiding targeted policy interventions. It also enhances transparency and helps investors gauge the health of key service industries that influence employment and consumption patterns.
Frequently Asked Questions
Q: What is the Index of Services Production (ISP)?
A: The ISP is a new statistical measure introduced by India’s Ministry of Statistics to track the output and growth of the services sector, similar to how the Index of Industrial Production tracks manufacturing.
Q: Which sectors are included in the ISP?
A: The ISP currently covers 19 sub-sectors such as trade, hospitality, transport, telecommunications, real estate, IT services, banking, insurance, and professional services, representing about 60% of the formal services economy.
Q: How is the ISP data collected?
A: The index uses a combination of Goods and Services Tax (GST) data, administrative records from government departments, and the Annual Survey of Incorporated Services Sector Enterprises to compile accurate and timely statistics.
