Archive · 25 Aug 2026
India’s Service Prices Diverge as Air Passenger Inflation Surges
The Indian government measured price changes for seven types of services.
Air passenger services became much more expensive than a year earlier, with prices rising almost 32 percent.
Pension fund management prices also increased, but by 5.20 percent.
Banking services were still cheaper than a year earlier.
Securities transaction prices also fell compared with the previous year.
Insurance and telecom prices changed only a little.
Railway passenger inflation stayed at 3.50 percent.
The government plans to add more sectors to this measurement system.
It eventually intends for producer-price data to help replace wholesale-price inflation figures.
Air passenger service inflation reached 31.94% year on year in Q1 FY27, the highest among seven covered services.
The air passenger service price index was reported at 126.4, compared with 106.9 in Q4 FY26; another account said no sequential comparison was provided because the sector’s reference period was FY26.
Pension fund management prices rose 5.20%, while banking service prices remained in deflation at -3.35%.
Securities transaction prices recorded -1.32% inflation, while insurance and telecom inflation stood at 0.98% and 0.72%, respectively.
Railway passenger inflation remained at 3.50%, while overall railway service inflation rose to 1.27%.
- Who
- The Indian government, through the Ministry of Commerce and Industry and the Office of Economic Adviser, released provisional service producer-price estimates.
- What
- Service prices moved unevenly across seven sectors, led by a 31.94% year-on-year increase in air passenger services.
- When
- The first quarter of FY27, the June quarter, compared with the same quarter a year earlier and, where reported, Q4 FY26.
- Where
- India.
- Why
- The Service Producer Price Index measures price movements from producers’ perspectives and is intended to improve economic, national-accounts, GDP and real-value-added measurements while gradually replacing Wholesale Price Index-based inflation figures.
- Covered services
- Banking, securities transactions, insurance, pension management, railways, air passenger services and telecom
- Air passenger inflation
- 31.94% year on year in Q1 FY27
- Air passenger index
- 126.4 in Q1 FY27; one report compared it with 106.9 in Q4 FY26, while another said no sequential comparison was provided because the sector’s reference period was FY26
- Highest other increase
- Pension fund management prices rose 5.20% year on year
- Banking services
- Price inflation was -3.35%, improving from -4.10% in Q4 FY26; the banking contribution index rose 6.90% year on year
- Railway services
- Overall railway service inflation was 1.27%, while railway passenger inflation remained at 3.50%
- Index framework
- The indices use 2022-23 as the base year and currently lack aggregate weights because the seven services do not cover the entire services sector
- Planned change
- The government plans to expand the Service PPI and gradually use it in place of Wholesale Price Index-based inflation figures over the next five years
