14 Sub-Sectors Surge in April as India Launches Index of Services Production

14 Sub-Sectors Surge in April as India Launches Index of Services Production​

India has marked a significant milestone in its statistical infrastructure with the release of the first trial Index of Services Production (ISP). This new macroeconomic indicator is designed to capture and track short-term performance changes within the country's vast services sector. As services constitute the backbone of modern Indian growth, the ISP represents a major step toward providing high-frequency data for informed economic policymaking.

Performance Snapshot: Double-Digit Growth across Key Services Sub-Sectors​

The initial trial release, covering 19 service sub-sectors in April 2026, shows robust momentum across the economy. Notably, 14 of these sub-sectors recorded double-digit growth when compared to April 2025. This suggests a strong underlying demand and recovery within several key segments.

Among the top five performing sectors for April 2026 were accommodation and food (37.2%), retail trade (30.8%), administrative & support services (28.7%), real estate (27.7%), and telecommunications (22.8%). These figures indicate significant activity spikes across consumer-facing and professional service domains.

Looking at the yearly trends for 2025-26, accommodation and food led with a strong monthly growth rate of 35.6%. This was followed closely by retail trade (30.5%), repair services (25.1%), wholesale trade (23.6%), and road transport (22.6%).

Understanding the New Index: Features and Methodology​

The introduction of ISP aligns India's statistical system with global best practices, enabling more precise economic monitoring. The base year for this new indicator has been set as 2024-25. This choice ensures alignment with other sectors utilizing the new Consumer Price Index (CPI) series.

The ISP is fundamentally designed to track short-term changes in the volume of output produced by the formal services sector, distinguishing itself from indicators that only measure industrial activity. This focus on 'volume' requires a price deflator, which transforms value-based (nominal) data into accurate volume-based (real) data.

The compilation utilizes various deflationary measures depending on the sector. For wholesale trade, the Wholesale Price Index (WPI) is applied. However, for most other sectors, either the relevant Consumer Price Index (CPI) or a designated CPI variant is used. CPI-General is specifically applied to banking and insurance, while CPI-Services covers areas where no specific CPI exists.

Building the ISP Framework: Global Alignment and Technical Oversight​

The conceptual and methodological framework for ISP was developed under the guidance of a Technical Advisory Committee (TAC), established by the Ministry of Statistics and Programme Implementation (MoSPI) in May 2025. The development process referenced international standards to ensure high quality and comparability.

Key global guidelines informing this development include the OECD Compilation Manual for Index of Services Production (2007) and guidance from Eurostat, the statistical office of the European Union. Several advanced economies regularly publish comparable indicators, such as France, Spain, and Slovenia.

The ISP data is intended for use by national accounts departments, economic ministries, researchers, and domain experts. Regular monthly trial indices will be released with a lag time of approximately 60 days, typically available on the 29th of each month or the following working day if the 29th is non-working day.

Data Ecosystem and Sectoral Coverage Details​

The ISP relies on a diversified data ecosystem, integrating administrative data, GST reporting, and the Annual Survey of Incorporated Services Sector Enterprises (ASISSE). ASISSE, launched in April 2026, aims to build a comprehensive database for the incorporated services sector.

GST data is set to be used in statistical applications for various sectors, including wholesale trade, retail trade, accommodation and food, telecommunications, real estate, and professional services. This incorporation of GST data marks a new step in statistical usage within India's economy.

Certain sectors are intentionally excluded from the ISP as they relate closely to core governmental activities or informal markets. These excluded sub-sectors include public administration and defence, financial services (excluding banking and insurance), social work without accommodation, and government-provided health and education services.

Why The Services Sector Matters for India's Growth Trajectory​

The services sector is central to India’s structural transformation and overall economic vitality. Since 2013-14, the sector has contributed over 50% of the Gross Value Added (GVA). In FY2024-25, the share of services GVA was close to 52.9%.

The industry is a massive generator of employment, accounting for roughly 30% of total workforce in India and having generated approximately 40 million jobs over the last six years. Furthermore, Indian services exports demonstrated strong momentum in FY2026-27, estimated at USD 103.41 billion across April-June 2026-27, reflecting a 6.16% Year-on-Year growth.

The introduction of the ISP directly addresses the need for timely monitoring in India's largest economic sector. As the Index of Industrial Production (IIP) focuses on industrial activity, the ISP provides essential short-term insights into the dynamism and performance of the services industry.