As many as 13 of the 19 services sub-sectors of the Indian economy recorded double-digit growth in August 2026 compared to the same month a year earlier, according to the Index of Services Production (ISP) — base year 2024-25 — released by the National Statistics Office (NSO) on 29 October 2026. The reading marks a broad-based improvement over July, when 10 of 19 sub-sectors cleared the double-digit threshold.

Fastest-Growing Segments

Retail trade emerged as the top performer, expanding 19.9% year-on-year in August — up from 18.5% in June. Real estate accelerated sharply to 17.6% from 14.4% in July, while repair services also logged 17.6% growth during the month.

The insurance sector posted 16.5% growth and banking services expanded 14.9%, up from 12.3% in July, reflecting heightened economic activity, according to official data. IT and computer-related services accelerated to 13.8% from 10.7% in July, while scientific and technical services including R&D clocked 14.2% growth year-on-year.

Transport and Logistics

Postal and courier services registered 13.2% growth, and telecommunications posted a robust 11.8% expansion. Road transport grew 9.4%, buoyed by fast-expanding highways, while water transport rose 9.5%. Railway transport growth more than doubled to 7.5%. Warehousing and support activities for transportation climbed to 11.2% from 9.8% in July. Accommodation and food services grew 11.9%, slightly lower than the 12.6% recorded in July.

Air Transport Drags — Fourth Consecutive Contraction

Air transport was the notable outlier, contracting 9.6% in August — the fourth consecutive month of decline — widening from a 8.4% contraction in July. According to official data, the continuing closure of Pakistan's airspace for Indian airlines and the widening Middle East conflict have adversely impacted international operations, squeezing routes and increasing operating costs for carriers.

Index Levels and Composition

In absolute index terms, accommodation and food stood highest at 148.2, followed by retail trade at 122, road transport services at 116.8, and repair services at 114.7. Administrative and support services — which had been the fastest-growing segment at 20.9% in July — moderated to 13.1% in August while remaining in the high-growth zone.

What the Data Signals

The broadening of double-digit growth from 10 sub-sectors in July to 13 in August suggests domestic services demand is strengthening heading into the festive season. This comes amid broader macro signals pointing to resilient consumption and credit growth. However, the sustained contraction in aviation — a high-frequency indicator of discretionary and business travel — remains a structural concern, particularly for carriers dependent on westbound international routes. The next ISP release will be closely watched to see if aviation stabilises or the drag deepens.