India’s services sector output grew at a robust pace in July, with 11 of the 19 sectors tracked under the trial Index of Services Production (ISP) growing quicker in July compared to June.
While the Ministry of Statistics and Programme Implementation (MoSPI) does not yet publish overall growth rate for the ISP, economists estimated that the output of the 19 services grew 13.5% in July, slightly higher than 13.2% in June.
Eight of the 19 sectors under ISP recorded double-digit year-on-year growth in July, the same as in June.
“The July 2026 ISP data reflect broad-based expansion in the services sector, as growth was observed across most sectors. Growth was led by encouraging performance in real estate and trade,” said Rajani Sinha, chief economist, CareEdge Ratings.
Administrative and support services saw the highest growth among the 19 sectors in July at 20.9%, followed by retail trade at 18.5%. Wholesale trade grew 12.1% in July, slower than the 15.1% growth a month ago. Real estate output growth moderated to 14.4% in July from 24.7% in June.
The services sector is a key driver of economic activity in India. The 19 sectors currently being covered under ISP account for around 60% of the formal services sector.
“The services sector growth rate, as represented by the 19 covered services, is tangibly higher than the overall IIP growth for August 2026 which was 8%. The economy is getting pulled by services growth relatively more than industrial or agricultural growth,” said DK Srivastava, chief policy advisor, EY India.
Air transport and repair services were the only two sectors where output contracted year-on-year in July. Air transport output fell 8.4% in July, a bigger contraction than 6% seen in June. Repair services output fell 5% year-on-year in July against a growth of 7.5% in June.
“Air transport sector continues to bear the brunt of the ongoing geopolitical tensions and elevated energy costs, with output registering a contraction for the fourth straight month,” Sinha said.
“Given the strong momentum visible across the other economic indicators, we expect the service sector to maintain its underlying strength in the months ahead. However, the sector could, to some extent, be affected by challenging external environment, energy price volatility, and supply chain frictions,” Sinha said.