India has introduced an experimental Index of Services Production (ISP) to track the services sector's monthly output using GST filings. The inaugural April 2026 data shows 14 out of 19 sub-sectors recording double-digit growth, led by hospitality and retail. This new tool helps economists and investors monitor the sector that accounts for over half of India’s economic value.
The Ministry of Statistics and Programme Implementation has launched a new monthly Index of Services Production (ISP) to provide a clearer, more frequent picture of the services sector. For years, India has relied on the Index of Industrial Production (IIP) to track factory output, but the services sector—which contributes more than half of India's Gross Value Added (GVA)—previously lacked a timely monthly indicator. This new index uses existing GST data to measure performance without adding extra reporting requirements for companies.
April 2026 Performance Highlights
The inaugural data for April 2026 suggests strong activity across the formal economy. The hospitality sector, specifically accommodation and food services, saw a significant rise of 37.2% compared to the same period last year. Retail trade also performed well with a 30.8% increase, while administrative and support services grew by 28.7%. Real estate activity was another bright spot, showing a 27.7% gain. These numbers point to robust consumer demand and corporate activity at the start of the current financial year.
Challenges in Specific Segments
While the overall trend is positive, the data also highlights areas of weakness. The air transport sector recorded a 13.9% contraction in April, and railway transport saw a marginal dip of 0.4%. For investors, these figures illustrate that different parts of the services economy are moving at different speeds. While consumer-facing sectors like retail and hospitality are expanding, specific transport segments are facing hurdles that could be due to seasonal shifts, rising operational costs, or changes in travel patterns.
Strategic Importance for Investors
This index is designed to help identify sectoral trends more quickly. By utilizing GST filings, the government aims to distinguish between temporary fluctuations and lasting changes in business performance. Investors can use this data to better understand the health of specific industries, such as IT, banking, and real estate, before quarterly corporate results are even released. However, it is important to note that the current ISP only tracks the formal sector. It does not include informal businesses or certain government-provided services, meaning it provides a focused, rather than exhaustive, view of the economy. Going forward, the ministry is expected to refine this data, and market participants will likely look to these monthly reports to gauge how policy changes or macroeconomic shifts—such as interest rate adjustments or tax updates—directly impact different segments of the services industry.