The growth in India’s services sector reached a six-month high in January, driven by accelerated expansion in new business fueled by robust demand from both domestic and international clients, according to a monthly survey. The HSBC India Services PMI Business Activity Index rose to 61.8 in January, up from 59 in December, marking the sharpest expansion in six months. A reading above 50 indicates expansion, while below 50 denotes contraction in the Purchasing Managers’ Index (PMI) framework.
The survey, based on responses from around 400 service sector companies, highlighted a faster pace of new business expansion and strong expectations for future activity. New export sales increased at the quickest rate in three months, with firms reporting gains from clients globally. Notably, the services exports market remained robust, including transactions with Afghanistan, Australia, Brazil, China, Europe, the UAE, and the US.
While companies reported an overall increase in expenses, driven by food, labor, and freight costs, output prices rose to the least extent in 11 months, as the majority of firms opted to keep charges unchanged. The survey also indicated strengthened business confidence, with firms anticipating investment and productivity gains to drive output growth in the coming year.
The HSBC India Composite PMI Output Index, a weighted average of manufacturing and services PMI indices, rose from 58.5 in December to 61.2 in January, signaling the sharpest upturn since mid-2023. The survey noted a further acceleration in the growth of private sector output, with service providers leading the upturn, and both segments recording faster rates of expansion in new business.
