India’s services growth broadens in July; 17 of 19 sectors expand

Activity across India’s formal services economy broadened in July, with 17 of the 19 sub-sectors tracked by the government recording year-on-year growth and 10 registering double-digit expansion, according to the latest trial Index of Services Production (ISP) data.

Retail trade expanded 18.5 per cent over July 2025, while administrative and support services recorded the strongest growth among the tracked segments at 20.9 per cent. The data, released by the Ministry of Statistics and Programme Implementation (MoSPI) on Tuesday, showed momentum across trade, banking, real estate, telecommunications and information technology services.

Retail gains pace

Retail trade remained among the strongest-performing segments, growing 18.5 per cent year-on-year. Wholesale trade also registered double-digit expansion, rising 12.1 per cent.

Administrative and support services grew 20.9 per cent, the highest among the 19 sub-sectors. Real estate expanded 14.4 per cent, while accommodation and food services registered growth of 12.6 per cent.

The figures pointed to broad-based expansion across consumer-facing and business services, although the performance varied considerably between individual segments.

Banking, IT expand

Banking services grew 12.3 per cent in July, while insurance expanded 8.9 per cent. Telecommunications recorded an 11 per cent increase.

IT and computer-related services grew 10.7 per cent, while professional, scientific and technical services, including research and development, expanded 10.4 per cent. Information and broadcasting services grew 10 per cent after having been in negative territory during earlier months.

Postal and courier services also returned to positive territory, registering year-on-year growth of 8.7 per cent.

Mixed picture in transport

Transport services presented a more varied picture. Road transport grew 9.9 per cent, while railway transport expanded 7.5 per cent and water transport recorded 7.7 per cent growth.

Warehousing and support activities for transportation grew 9.8 per cent. Air transport, however, contracted 8.4 per cent from a year earlier, making it the weakest-performing segment in the July data.

Repair services were the only other sub-sector to record a contraction, declining 5 per cent. Arts, entertainment and recreation services registered relatively modest growth of 1.7 per cent.

New monthly gauge

The ISP is a new high-frequency indicator introduced by MoSPI to measure short-term changes in output across the formal services economy. It has been designed as the services-sector counterpart to the Index of Industrial Production, which measures changes in industrial output.

The current trial series uses 2024-25 as its base year and covers 19 services sub-sectors accounting for around 60 per cent of the services economy. The coverage includes wholesale and retail trade, transport, banking, insurance, telecommunications, real estate, IT, professional services and administrative support.

Private health and education services are expected to be incorporated later as more comprehensive data become available.

Trial series continues

MoSPI is currently publishing sub-sectoral indices on a trial basis to assess the stability of the series, improve coverage and obtain feedback before the framework is finalised. An overall composite ISP has not yet been published for July.

The July numbers nevertheless showed a broader spread of positive growth than the previous month. In June, 18 of 19 sub-sectors had expanded, but only eight registered double-digit growth. In July, although the number of expanding sectors slipped to 17, the number recording double-digit growth increased to 10.

The new monthly indicator is expected to give policymakers and businesses a more timely assessment of services activity, reducing reliance on quarterly GDP numbers and indirect high-frequency indicators to gauge momentum in a sector that accounts for more than half of India’s gross value added.