India’s Ministry of Statistics and Programme Implementation (MoSPI) has released the country’s first trial Index of Services Production (ISP) for April 2026, filling a long-standing gap in the nation’s economic data architecture. The ISP, built on a 2024-25 base year and structured under the National Industrial Classification (NIC) 2025, is a monthly high-frequency indicator designed to track output across 19 formal services sub-sectors that together account for roughly 60% of India’s services economy. It will be published on the 29th of every month, serving as the services-sector counterpart to the well-established Index of Industrial Production (IIP).
What Is the Index of Services Production?
The Index of Services Production (ISP) is a monthly volume-based macro indicator that measures short-term changes in the real output of India’s formal services sector relative to a fixed base period. It is modelled on the same conceptual framework as the Index of Industrial Production (IIP), which has long tracked output in mining, manufacturing, electricity, gas supply, and water management.
The ISP measures changes in the volume of services produced, not the value added. This distinction is important. While GDP captures value added (the difference between output and input costs), the ISP captures gross output volumes. It uses a Laspeyres fixed-base volume index formula, where sectoral weights remain fixed until the next base year revision.
The trial series uses 2024-25 as its base year, meaning the index is set to 100 for that reference period. This base year was chosen to align with the revised Consumer Price Index (CPI) base of 2024, ensuring consistency across macroeconomic indicators. Subsequent monthly readings are expressed as a percentage of the base year value, allowing direct comparison of output changes over time.
Why India Needed a Services Output Indicator
India’s services sector is the largest contributor to the national economy, accounting for more than 55% of the country’s Gross Value Added (GVA) and employing roughly 30% of the workforce. In FY 2025-26, the services sector grew by an estimated 9.3%, making it the primary driver of India’s 7.7% GDP growth that year.
Despite this dominance, India lacked an official monthly measure of services output. The IIP has tracked industrial production since its first series in 1937, but no equivalent existed for services. Policymakers, businesses, and analysts had to rely on quarterly GDP data or the private sector’s S&P Global Services Purchasing Managers’ Index (PMI) for a sense of near-term services trends.
The ISP fills this gap. By providing a timely, official, and methodologically transparent monthly indicator, it brings India’s statistical framework in line with global best practices. Countries such as the United Kingdom, members of the European Union, and South Korea already publish similar services production indices, and India has now joined this group.
What the ISP Covers: 19 Sub-Sectors and NIC 2025
The trial ISP covers 19 sub-sectors of the formal services economy, classified according to the National Industrial Classification (NIC) 2025. NIC 2025, released by MoSPI in November 2025, is the first major revision of India’s industrial classification system since NIC 2008. It introduces a 6-digit coding structure (replacing the earlier 5-digit system) and is aligned with the United Nations’ International Standard Industrial Classification (ISIC) Rev. 5. The new classification expands coverage to emerging areas such as digital platforms, cloud services, renewable energy, fintech, and the gig economy.
The 19 sub-sectors covered under the ISP are:
| Sub-Sector | Key Data Source |
|---|---|
| Wholesale Trade | GST |
| Retail Trade | GST |
| Repair Services | GST |
| Accommodation and Food Services | GST |
| Railway Transport | Administrative |
| Road Transport | GST |
| Water Transport | GST |
| Air Transport | Administrative |
| Warehousing and Support Activities | GST |
| Postal and Courier | GST |
| Telecommunications | GST |
| Information and Broadcasting | GST |
| Banking | Administrative |
| Insurance | Administrative |
| Real Estate | GST |
| IT and Computer Related Services | GST |
| Professional, Scientific and Technical Services | GST |
| Administrative and Support Services | GST |
| Arts, Entertainment and Recreation | GST |
Together, these sub-sectors represent approximately 60% of India’s formal services economy. The index currently excludes sectors such as public administration, defence, core government activities, the informal sector, and non-market services. Two significant omissions are health and education, which are exempt from GST. MoSPI is working on including these using administrative data from the Annual Survey of Incorporated Services Sector Enterprises (ASISSE).
How the ISP Is Compiled
The ISP draws on three principal data sources, each chosen based on the nature and data availability of the service industry.
GST data is used for most market-oriented services, including trade, hospitality, transport, telecom, IT, and real estate. Since services are consumed immediately after production, the outward supplies reported in GST returns serve as a reliable proxy for output. This approach has a major advantage: it imposes no additional compliance burden on businesses, as the data is already collected for tax purposes.
Administrative data is used for sectors with dedicated regulatory reporting. Railway and air transport output is measured using physical quantity indicators such as passenger-kilometres travelled. Banking and insurance data is drawn from regulatory submissions to the RBI and IRDAI.
ASISSE data from the Annual Survey of Incorporated Services Sector Enterprises is used to derive sectoral weights for the index.
Because most service data is collected in nominal (value) terms, price effects must be removed to measure real output changes. The ISP uses appropriate price deflators for this purpose. For most sub-sectors, the Consumer Price Index (CPI) serves as the deflator. For sectors where Service Producer Price Indices (SPPIs) are available, such as telecom, banking, and insurance, those are used instead. For air and rail transport, no deflator is needed since output is already measured in physical units.
The methodological framework for the ISP was developed under the guidance of the Technical Advisory Committee on Index of Services Production (TAC-ISP), constituted by MoSPI in May 2025. The committee was chaired by Debjani Ghosh, Distinguished Fellow at NITI Aayog, and included experts from academia, industry, and government. Its approach paper was released for public feedback in April 2026, and the final report was published in July 2026.
First ISP Data: April 2026 Performance
The inaugural ISP release for April 2026 revealed broad-based growth across India’s formal services sector. 14 of the 19 sub-sectors recorded double-digit year-on-year growth, while nearly all categories posted positive expansion.
| Sub-Sector | Growth (April 2026 vs April 2025) |
|---|---|
| Accommodation and Food | 37.2% |
| Retail Trade | 30.8% |
| Administrative and Support Services | 28.7% |
| Real Estate | 27.7% |
| Telecommunications | 22.8% |
| Repair Services | 19.2% |
| Road Transport | 18.5% |
| Warehousing and Support Activities | 18.2% |
| Professional, Scientific and Technical Services | 16.5% |
| Arts, Entertainment and Recreation | 16.4% |
| Insurance | 15.6% |
| Wholesale Trade | 15.3% |
| IT and Computer Related Services | 15.2% |
| Banking | 12.2% |
| Water Transport | 5.7% |
| Postal and Courier | 3.3% |
| Information and Broadcasting | 2.5% |
| Railway Transport | -0.4% |
| Air Transport | -13.9% |
Accommodation and food services led all sub-sectors with a 37.2% expansion, reflecting sustained post-pandemic demand for travel, dining, and hospitality. Retail trade grew 30.8%, pointing to resilient domestic consumption. Real estate activities expanded by 27.7%, while administrative and support services rose 28.7%.
Two transport segments recorded declines. Air transport contracted 13.9%, attributed to elevated airfares caused by higher aviation fuel costs following the West Asia conflict. Railway transport slipped marginally by 0.4%.
MoSPI noted that since the ISP is a trial series, the data should be read over time rather than interpreted from a single month. An overall composite ISP was not released alongside the sub-sectoral data; MoSPI plans to introduce the headline index after assessing the stability of the trial series.
Significance for Economic Policy and GDP Estimation
The introduction of the ISP is a landmark step in strengthening India’s macroeconomic statistical system. For decades, the services sector, which contributes the largest share to India’s GDP, was the only major economic segment without a high-frequency official output indicator. The ISP changes this.
For policymakers, the index provides a timely monthly read on services activity, enabling faster identification of slowdowns or overheating in specific sub-sectors. This can inform targeted interventions by ministries and regulators.
For GDP estimation, the ISP will improve the robustness of quarterly national accounts. MoSPI Secretary Saurabh Garg has indicated that the monthly services index, together with labour, industrial, and infrastructure indicators, will strengthen the government’s ability to assess economic activity in real time. The data will feed directly into the compilation of quarterly GDP estimates, making them more accurate.
For businesses and investors, the ISP offers an official benchmark to supplement the private sector’s Purchasing Managers’ Index, helping with investment decisions and demand forecasting.
Chief Economic Advisor V. Anantha Nageswaran described the launch of a monthly services output indicator as a real achievement. He noted that building price indices for services remains a challenge, as constructing services-sector deflators is inherently more complex than for goods. Investing in better deflators will be critical for the ISP’s long-term accuracy.
The Road Ahead
The ISP is currently at a trial stage, and MoSPI has outlined a clear roadmap for its evolution.
A composite headline ISP will be introduced within the next few months. MoSPI Secretary Saurabh Garg has stated that the headline index could initially be launched using the existing 19 sectors while work continues on expanding coverage.
Coverage expansion is the next priority. MoSPI is working on incorporating health services, education, and ownership of dwellings into the ISP framework. These sub-sectors, currently excluded because they are exempt from GST, will be compiled using administrative data from ASISSE. Once added, the ISP’s coverage of the formal services economy will rise from 60% to an estimated 85-90%.
The index will be released with a lag of about 60 days on the 29th of every month. This lag is shorter than the quarterly GDP release cycle and makes the ISP a genuinely high-frequency indicator.
In the longer term, the ISP is expected to become a regular component of India’s official statistics, alongside the IIP and CPI, providing a near-complete monthly picture of the country’s economic production.
Key Takeaways
- MoSPI launched the trial Index of Services Production (ISP) with 2024-25 as the base year, covering 19 formal services sub-sectors.
- The ISP is the services-sector counterpart of the IIP and will be released on the 29th of every month with a lag of about 60 days.
- The index uses a Laspeyres fixed-base volume formula, with data drawn from GST returns, administrative data, and the Annual Survey of Incorporated Services Sector Enterprises (ASISSE).
- The trial ISP covers about 60% of the formal services economy, with plans to expand to 85-90% by adding health, education, and ownership of dwellings.
- The Technical Advisory Committee on ISP (TAC-ISP), chaired by Debjani Ghosh of NITI Aayog, provided the methodological guidance for the index.
- India joins the UK, EU, and South Korea in publishing an official monthly services production index.
- A composite headline ISP is expected to be introduced within the next few months.
