MoSPI launches first services production index, retail and hospitality lead growth

NEW DELHI: India’s services sector has a new scorecard. The Ministry of Statistics and Programme Implementation (MoSPI) has released the country’s first trial Index of Services Production (ISP) for 19 sub-sectors, providing a monthly snapshot of activity across nearly 60 per cent of the formal services economy.

The inaugural index, based on 2024-25 as the base year, covers April 2026 and marks a significant addition to India’s basket of macroeconomic indicators. The ministry said the monthly sub-sectoral indices will now be published on the 29th of every month, while an overall services production index will be introduced later after assessing the stability of the trial series and expanding sectoral coverage.

The new index is designed to fill a longstanding gap in India’s economic data by tracking short-term movements in the country’s formal services sector, which contributes more than half of the nation’s economic output.

April’s data painted a broadly positive picture. Fourteen of the 19 sub-sectors posted double-digit year-on-year growth, while nearly every category registered an expansion compared with April 2025.

The fastest-growing segment was accommodation and food services, which surged 37.2 per cent, reflecting continued momentum in travel, tourism and hospitality. It was followed by retail trade, up 30.8 per cent, administrative and support services, which grew 28.7 per cent, and real estate, which advanced 27.7 per cent.

Other sectors that recorded healthy gains included telecommunications (22.8 per cent), repair services (19.2 per cent), road transport (18.5 per cent), warehousing and transport support services (18.2 per cent), professional, scientific and technical services (16.5 per cent), arts, entertainment and recreation (16.4 per cent), insurance (15.6 per cent), wholesale trade (15.3 per cent), IT and computer-related services (15.2 per cent) and banking (12.2 per cent).

Not every sector moved in the same direction. Air transport contracted 13.9 per cent, making it the weakest performer in the index, while railway transport slipped 0.4 per cent. Information and broadcasting posted a modest 2.5 per cent increase, while postal and courier services grew 3.3 per cent and water transport rose 5.7 per cent.

The ISP has been developed under the guidance of the Technical Advisory Committee on Index of Services Production (TAC-ISP), constituted in May 2025. The committee included representatives from academia, industry associations and government ministries overseeing various services sectors. Its report was released on July 7.

The index relies on multiple data sources rather than a single survey. Administrative data is used for sectors such as air transport, railways, banking and insurance, while GST data powers indices for industries including trade, hospitality, telecommunications, IT services, real estate and professional services. Weights are derived from the Annual Survey of Incorporated Services Sector Enterprises (ASISSE).

To measure real output, MoSPI adjusts nominal data using wholesale and consumer price indices. Wholesale trade is deflated using the Wholesale Price Index (WPI), while other services use relevant Consumer Price Index (CPI) categories or suitable proxy indices.

The ministry stressed that the monthly ISP is being released on an experimental basis to assess data quality, improve methodology and gather stakeholder feedback before introducing a comprehensive services production index. It also noted that the railway, banking and insurance indices are based on provisional monthly data and will be revised annually.