The HSBC India Composite Output Index, which maps both services and manufacturing, stood at 50.3 in February, slightly higher than 49.6 in January, indicating a fractional rate of expansion.
The latest growth was centred on the manufacturing sector, HSBC said. A PMI reading above 50 indicates growth while a lower reading means contraction.The HSBC services business activity index rose from 48.3 in the previous month to 48.8 in February.
"Service sector activity continued to stabilise, but the PMI reading remains below the water line and point to weak growth conditions," HSBC chief economist for India & Asean Leif Eskesen said.
Weaker demand, a fragile economy and competitive pressures led to a decline in new business placed with Indian services firms, HSBC said.
On price rise the survey said that while inflation for input prices eased a bit, it picked up for prices charged as businesses passed on higher costs to clients. The annual rate of inflation, based on the monthly wholesale price index, eased to a seven-month low of 5.05% in January.