Archive · 29 Jul 2026
India's Services Sector Growth Slows in May
The Indian government has started a new way to measure how well the services sector is doing each month.
This sector is very important because it makes up more than half of India's economy.
The new data shows that the growth of this sector slowed down a lot in May compared to April.
Even though some parts of the services sector, like hotels and food services, did well, most parts grew less in May than in April.
The government is still testing this new way of measuring, so they are not giving an overall growth number yet.
Experts have different opinions about what this means for the future.
Some think it shows good growth momentum, while others think it shows a slowdown.
India's services sector growth may have halved from 20.5% in April to 9.5% in May, according to experimental data from MoSPI.
The Index of Services Production (ISP) is a new monthly measure of the services sector's performance.
The ISP covers about 60% of the services sector and is calculated using GST and administrative data.
Most sub-sectors of the services sector grew in May, but at a slower pace than in April.
The services PMI rose to 59.8 in May from 58.8 in April, indicating growth momentum.
- Who
- Ministry of Statistics and Programme Implementation (MoSPI)
- What
- Release of experimental Index of Services Production (ISP) for 19 sub-sectors
- When
- May 2024
- Where
- India
- Why
- To measure the performance of the services sector, which dominates the Indian economy and makes up more than half the GDP.
Optimistic View
Pessimistic View
Growth Momentum
Optimistic View
There are clear indications of robust growth momentum for the first quarter of 2026-27, with services sector showing an average growth of 15.3%.
Pessimistic View
The services sector growth has more than halved from around 20.5% in April to approximately 9.5% in May, indicating a significant slowdown.
- Base Year
- 2024-25
- Services Sector Growth (April)
- 20.5%
- Services Sector Growth (May)
- 9.5%
- Industry Growth (May)
- 5%
- Accommodation and Food Growth (May)
- 27.4%
- IT and Computer Services Growth (May)
- 10.3%
- Services PMI (May)
- 59.8
- Services PMI (April)
- 58.8