India Releases First Trial Service Production Index

India Releases First Trial Service Production Index

The Ministry of Statistics and Programme Implementation (MoSPI) has released the trial version of India’s first Service Production Index (SPI) with 2024–25 as the base year, covering 19 service sub-sectors. It is the country's first monthly index designed to measure short-term economic activity in the formal services sector.The Service Production Index provides a high-frequency indicator of the performance of India's services sector, complementing existing economic indicators such as the Index of Industrial Production (IIP). It enables timely assessment of trends in service sector output and supports evidence-based policymaking.

Key Findings

¨     The inaugural ISP for April 2026 covers 19 services sub-sectors, representing about 60% of India’s services sector, with 14 sub-sectors recording double-digit year-on-year growth and almost all others registering positive growth.

¨     Accommodation & Food Services (37.2%), Retail Trade (30.8%), Administrative & Support Services (28.7%), and Real Estate Activities (27.7%) emerged as the top-performing sectors.

¨     Other major contributors included Telecommunications (22.8%), Repair Services (19.2%), Road Transport (18.5%), Warehousing & Support Activities for Transportation (18.2%), along with double-digit growth in Professional, Scientific & Technical Services, Arts & Entertainment, Insurance, Wholesale Trade, IT & Computer Related Services, and Banking.

¨     Air Transport was the weakest-performing sector, contracting by 13.9%, while Railway Transport recorded a marginal decline of 0.4%.

¨     MoSPI plans to expand the ISP by adding Health, Education, and Ownership of Dwellings, increasing coverage to 85–90% of the formal services sector, before releasing a composite overall Index of Services Production after evaluating the trial series.

Index of Services Production (ISP)

¨     It is a monthly high-frequency macroeconomic indicator that measures short-term changes in the volume of output (services produced) by India’s formal services sector.

¨     It tracks short-term changes in the volume of output produced by the formal services sector relative to a specified base year.

¨     It is the services-sector counterpart of the Index of Industrial Production (IIP), which measures production in manufacturing, mining and electricity.

¨     Objective: The ISP has been introduced to provide a timely monthly measure of services-sector activity, thereby strengthening India’s macroeconomic statistical framework.

¨     It enables policymakers, businesses and researchers to monitor short-term movements in the country’s largest economic sector.

Base Year: 2024–25.

¨     Coverage: The present trial ISP covers 19 formal services sub-sectors, accounting for nearly 60% of India’s services sector.

¨     Scope: The ISP covers formal sector enterprises only, based primarily on GST and administrative datasets.

¨     Services related to core government functions; non-market activities and the informal sector are presently excluded.

Significance of the ISP

¨     Addresses a Major Statistical Gap: Fills the long-standing absence of a monthly production indicator for the services sector, which contributes about 56.4% of India’s Gross Value Added (FY26 First Advance Estimates).

¨     Strengthens Macroeconomic Indicators: Complements the Index of Industrial Production (IIP) by providing a regular high-frequency measure of services-sector output.

¨     Supports Evidence-Based Policymaking: Enables policymakers, businesses, investors and researchers to monitor monthly trends and make timely decisions.

¨     Improves GDP Estimation: Provides a reliable high-frequency indicator for estimating services-sector Gross Value Added (GVA), improving quarterly and annual GDP estimates.

¨     Supports Employment and Exports: The sector accounts for ~30% of total employment across India and generated ~40 million jobs over the past six years.

¨     India’s services exports maintained strong momentum in FY2026–27, and the Government aims to achieve a 10% share in global services exports by 2047.

¨     Promotes Data-Driven Governance: Integrates GST records, administrative databases and enterprise survey data to improve data quality while reducing reporting burden.