India has introduced the index of services production (ISP), its first high-frequency indicator to measure the output of the services sector. The new index is expected to improve economic monitoring, strengthen national income estimates and support evidence-based policy-making.
The launch follows significant improvements in the country's statistical ecosystem over the past decade, including the availability of high-frequency goods and services tax (GST) data, the introduction of the annual survey of incorporated services sector enterprises (ASISSE) and the expansion of digital administrative databases.
The ISP measures short-term changes in the volume of output generated by the formal services sector relative to a base year. Since services account for the largest share of India's economy, the government expects the index to provide a more timely assessment of economic activity than was previously possible.
Trial Release
The government has released the first trial version of the ISP covering 19 service sub-sectors for April 2026. These account for around 60% of the services sector.
Of the 19 sub-sectors, 14 recorded double-digit growth over April 2025.
The fastest-growing sub-sectors in April 2026 were accommodation and food services (37.2%), retail trade (30.8%), administrative and support services (28.7%), real estate (27.7%) and telecommunications (22.8%).
For FY25-26, the strongest-performing sub-sectors were accommodation and food services (35.6%), retail trade (30.5%), repair services (25.1%), wholesale trade (23.6%) and road transport (22.6%).
Monthly Publication
The ISP uses 2024-25 as the base year, aligning it with the revised consumer price index (CPI) series.
According to the government, monthly trial estimates will be released with a lag of about 60 days and published on the 29th of every month or the next working day if the 29th is a holiday.
Different price deflators are used across sectors. Wholesale trade is adjusted using the wholesale price index (WPI), while most other sectors use the CPI or the closest available CPI series. CPI-General is used for repair and maintenance, banking and insurance, while CPI-Services is applied where no sector-specific CPI is available.
Since service-sector data is generally collected in value terms, price deflators are required to remove the impact of inflation and estimate the real volume of services produced.
Development of the Framework
The ministry of statistics and programme Implementation (MoSPI) constituted a technical advisory committee (TAC) in May 2025 to develop the methodology for the ISP.
The committee included experts from academia, industry associations and government departments and referred to international practices, including the Organisation for Economic Co-operation and Development's (OECD) Compilation Manual for Index of Services Production and guidance issued by Eurostat.
Several countries, including France, Spain, Slovenia, South Korea and UK, already publish comparable services-sector production indices.
Coverage
In its initial phase, the ISP covers service sub-sectors where reliable high-frequency data is available. These include wholesale and retail trade, transport, banking, insurance, telecommunications, hotels and restaurants, real estate, professional, scientific and technical services and arts, entertainment and recreation.
Health and education services will be included after ASISSE data becomes available.
The index excludes public administration and defence, financial services outside banking and insurance, social work activities without accommodation, services provided by membership organisations, personal services, private households employing staff, extraterritorial organisations, government-provided health and education services and gambling and betting activities. According to the government, these sectors are either predominantly government functions or lack reliable market-based data.
Data Sources
The ISP draws data from three principal sources.
Administrative data is used for sectors such as air transport, railways, banking and insurance.
ASISSE data will be used for private health and education services once the survey results become available.
For the first time, GST data is being used for statistical compilation across several services sectors, including wholesale and retail trade, repair services, accommodation and food services, road and water transport, warehousing, postal and courier services, telecommunications, information and broadcasting, real estate, information technology services, professional and technical services, administrative support services and arts and recreation.
Why the ISP Matters
The services sector has become the largest contributor to India's economy, accounting for more than 50% of gross value added (GVA) since 2013-14. In 2024-25, its share stood at about 52.9%.
The sector also accounts for around 30% of total employment and has generated nearly 40mn (million) jobs over the past six years.
Services exports continue to grow. During April-June FY26-27, exports are estimated at US$103.41bn (billion), up 6.16% from a year earlier. The government has set a target of increasing India's share in global services exports to 10% by 2047.
Until now, short-term economic activity in India was tracked mainly through the index of industrial production (IIP), which measures industrial output but does not capture developments in the services sector. The ISP is intended to bridge that gap by providing a regular indicator of activity in the country's largest economic sector.
