India services sector: 16 of 19 ISP sub-sectors grow in May 2026
Synopsis
India's first-ever monthly sub-sectoral services index shows 16 of 19 segments growing in May 2026, with Accommodation and Food Services surging 27.4%. While the number of double-digit performers moderated from April's 14 to 8, the breadth of the recovery — spanning banking, IT, real estate, and telecom — signals resilient momentum in the formal services economy.
Key Takeaways
16 of 19 ISP sub-sectors recorded positive year-on-year growth in May 2026 , per MoSPI data released on 29 July 2026 .
Accommodation and Food Services led with 27.4 per cent growth; its index rose from 116.9 to 148.9 .
Eight sub-sectors posted double-digit growth, including banking (12.1%) , IT (10.3%) , real estate (17.7%) , and telecom (11.8%) .
Three sub-sectors contracted : information and broadcasting ( -7.6% ), air transport ( -2.8% ), and postal and courier services ( -1% ).
The ISP covers roughly 60 per cent of India's formal services sector and is currently published on an experimental basis .
An overall ISP will be released after MoSPI confirms data stability across sub-sectoral indices.
Sixteen of the 19 sub-sectors tracked by India's Index of Services Production (ISP) recorded positive year-on-year growth in May 2026, with eight of them posting double-digit expansion, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Wednesday, 29 July 2026. The figures, compiled with 2024-25 as the base year, mark a broad-based recovery across the formal services sector.
Top Performers in May 2026
Accommodation and Food Services led all sub-sectors with the highest growth of 27.4 per cent, its index climbing to 148.9 in May 2026 from 116.9 a year earlier. Real estate services followed with 17.7 per cent growth, while retail trade expanded 13.3 per cent.
Banking grew 12.1 per cent and telecommunications rose 11.8 per cent. Warehousing and support activities for transportation posted 11.5 per cent growth, professional, scientific and technical services (including research and development) expanded 11 per cent, and information technology and computer-related services grew 10.3 per cent.
Moderate Gainers and Laggards
Repair services grew 9.8 per cent, while water transport expanded 5.6 per cent. Administrative and support services recorded 5 per cent growth, followed by road transport at 4.4 per cent, wholesale trade at 3.7 per cent, and railway transport at 3.4 per cent. Insurance services grew 2.7 per cent, while arts, entertainment and recreation services expanded 1.6 per cent.
Three Sub-Sectors in Contraction
Not all segments shared in the upturn. Information and broadcasting contracted 7.6 per cent — the steepest decline among all sub-sectors. Air transport dipped 2.8 per cent, and postal and courier services shrank 1 per cent. The data for railway, banking, and insurance sub-sectors are based on provisional monthly figures and will be revised annually, MoSPI noted.
Context: The ISP's Experimental Status
The monthly ISP is currently being published on a trial basis, with MoSPI using the series to examine data quality, test resilience, and gather stakeholder feedback. The indices cover approximately 60 per cent of India's formal services sector — marking the first time a monthly measure of short-term services movements has been available at the sub-sectoral level.
Notably, the April 2026 release had shown 14 of 19 sub-sectors registering double-digit growth, making May's eight double-digit performers a moderation but still a broadly positive signal. An overall ISP aggregating all sub-sectors will be released after MoSPI is satisfied with the stability and coverage of the trial series.
Point of View
IT, real estate, and telecom suggests services momentum is not concentrated in one pocket — a more durable signal than a single sector spike. The moderation from April's 14 double-digit sub-sectors to 8 in May warrants watching, but the contraction in air transport and information and broadcasting points to sector-specific headwinds rather than a systemic slowdown. The bigger structural question is what the overall ISP will reveal once MoSPI aggregates coverage beyond the current 60 per cent — the missing 40 per cent of informal and unorganised services could materially alter the picture.
NationPress
29 Jul 2026
Frequently Asked Questions
What is the Index of Services Production (ISP)?
The Index of Services Production (ISP) is a monthly statistical index released by MoSPI that measures short-term movements in India's formal services sector across 19 sub-sectors. It currently covers approximately 60 per cent of the formal services economy and is being published on a trial basis with 2024-25 as the base year.
Which services sub-sector grew the fastest in May 2026?
Accommodation and Food Services recorded the highest growth of 27.4 per cent in May 2026, with its index rising to 148.9 from 116.9 a year earlier. Real estate services came second at 17.7 per cent.
Which sub-sectors contracted in May 2026?
Three sub-sectors declined in May 2026: information and broadcasting fell 7.6 per cent, air transport dipped 2.8 per cent, and postal and courier services contracted 1 per cent.
How does May 2026 compare to April 2026?
In April 2026, 14 of 19 sub-sectors posted double-digit growth. In May 2026, that number moderated to 8, though 16 of 19 sub-sectors still recorded positive growth overall — indicating broad but somewhat softer momentum.
When will MoSPI release the overall ISP figure?
MoSPI has stated that an overall ISP aggregating all sub-sectors will be published after it has assessed the stability, resilience, and improved coverage of the sub-sectoral trial series. No specific date has been announced.
