India’s services sector saw a pickup in growth momentum in January. HSBC India Services PMI rising to 58.5 from 58.0 in December, hitting a two-month high.
According to the latest HSBC India Services PMI data released by S&P Global, the growth was supported by stronger demand, improved business confidence and a return to hiring.
In the Purchasing Managers’ Index (PMI) parlance, a reading above 50 indicates expansion, while a score below 50 denotes contraction.
Strong domestic and overseas demand lifts India services PMI: HSBC
“India’s services PMI rose to 58.5 in January, up from 58.0 in December, signalling sustained momentum in the sector. Robust output growth was driven by a steady influx of new orders, including increased international demand from South and Southeast Asia,” said Pranjul Bhandari, Chief India Economist at HSBC.
Service providers in India noted faster growth in new business intake and output. They were also more upbeat towards the outlook and hired additional staff, the survey noted.
According to the survey, new orders rose at the quickest pace in two months. The main source of new business gains was the domestic market, but international orders nevertheless rose solidly. Survey participants remarked on new business gains from clients in Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand and Vietnam. Service providers in India were more upbeat towards the outlook.
“Business confidence climbed to a three-month high, supported by efficiency gains, effective marketing, and the acquisition of new clients. While input and output prices are rising, they remain fairly mild by historical standards,” Bhandari added.
On the price front, there were quicker albeit still moderate increases in input costs and selling charges, the survey said. Cost pressures were by far most intense in the Consumer Services category, while the strongest increase in output charges was noted in the Finance & Insurance sector.
Meanwhile, during January, India’s private sector witnessed quicker increases in new orders and output, which in turn supported job creation and strengthened business confidence.
India Composite PMI rises to 58.4 in January as demand improves
The HSBC India Composite PMI Output Index rose to 58.4 in January from last December’s 11-month low of 57.8.
Composite PMI indices are weighted averages of comparable manufacturing and services PMI indices. Weights reflect the relative size of the manufacturing and service sectors according to official GDP data.
“The composite PMI also strengthened in January, reflecting solid demand growth across both manufacturing and services,” Bhandari said. On the job front, after stagnating in December, private sector employment increased at the start of 2026. Slight rates of job creation were noted at manufacturing firms and their services counterparts, the survey said.
with the inputs from PTI