The Trial Services Index shows that 10 of 19 subsectors posted double-digit growth in July | Today’s news

New Delhi: Ten of the 19 sub-sectors tracked by India’s new index of services production (ISP) recorded double-digit growth in July 2026 from a year earlier, while seven others also expanded, signaling sustained momentum in formal sector services despite mixed signals from manufacturing and foreign trade.

The data was part of the fourth trial version of the ISP, which the government unveiled on Tuesday with 2024-25 as the base year. The index represents a major revision of India’s economic statistics and provides policymakers with a long-awaited monthly measure of activity in the services sector, which makes up more than half of the economy.

These 19 sectors account for about 60% of the service economy. A single composite ISP will be released later, after evaluating the stability and resilience of the sub-sector indices and improving their coverage, the Ministry of Statistics and Program Implementation (MoSPI) said in a statement.

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The monthly series is expected to improve short-term gross domestic product (GDP) forecasts, help the central bank better gauge demand conditions when setting monetary policy, and provide businesses with another tool to monitor sectoral trends.

Major subsectors that continued to grow strongly in July include accommodation and catering (12.6%), retail (18.5%), administrative and support services (20.9%), banking (12.3%), wholesale trade (12.1%) and real estate (14.4%).

Air travel services fell 8.4% in July from a year earlier as conflict in West Asia pushed up energy prices. Repair services also fell 5% during the month. Postal and courier and information and radio services, which were in the negative zone in previous months, grew by 8.7% in July, respectively. 10%.

The growth of rail traffic is recovering

Rail transport growth resumed in July, rising 7.5%, while road transport services rose 9.9% and water transport rose 7.7%, according to MoSPI data. Wholesale trade rose 7.7% during the month. The telecommunications sector grew by 11%, banking by 12.3% and insurance by 8.9%.

Information technology (IT) and computer-related services grew by 10.7% in July, professional, scientific and technical services including research and development by 10.4%, administrative and support services by 20.9% and arts, entertainment and recreation services by 1.7%.

The ISP covers the formal services economy, including wholesale and retail trade, transportation, banking, insurance, telecommunications, hotels and restaurants, real estate, information technology, professional services, administrative support services, and arts and entertainment. Private health and education services will be incorporated later as more comprehensive survey data become available.

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The index excludes mainly non-market activities such as public administration, defence, state health and education, household services and some social services.

The ISP was designed as an equivalent of the Index of Industrial Production (IIP) in the services sector and provides the government, the Reserve Bank of India (RBI) and financial markets with a high-frequency indicator to assess economic activity instead of relying mostly on quarterly GDP estimates and indirect proxies such as GST collections, Purchasing Managers’ Indices (PMI) and bank credit.

MoSPI released the first ISP test series for April on July 14. In the initial series, 14 out of 19 subsectors posted double-digit year-on-year growth. A second series for May was released on July 29, showing that eight of the 19 subsectors posted double-digit growth. The third test ISP for June was released on August 29, which also showed that eight of the 19 subsectors posted double-digit growth.

First, to verify the methodology

The government said the test series will be released initially to validate the methodology and get feedback from stakeholders before the index becomes part of India’s regular statistical reports.

The new indicator comes at a time when services have emerged as a major driver of India’s economic growth, accounting for more than 53% of gross value added (GVA) and contributing significantly to employment, exports and investment.

Unlike the IIP, which measures physical output in manufacturing, mining and electricity, the ISP captures changes in the real output of services. Since services are generally produced and consumed simultaneously and do not accumulate inventories, the index primarily uses turnover as an indicator of output after adjusting for inflation.

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The biggest methodological innovation is the extensive use of Goods and Services Tax (GST) data.

Every month, millions of businesses report external supplies under the GST system. These aggregate records are mapped to National Industrial Classification (NIC) codes and deflated using appropriate price indices to estimate real output. For non-GST sectors – including parts of railways, healthcare, education and some insurance activities – the index relies on administrative databases and an annual overview of businesses in the Incorporated Services sector.

With the launch of the ISP, India’s statistical architecture now offers high-frequency production indicators for both manufacturing and services, providing policymakers and investors with a more comprehensive picture of the country’s evolving economy.