India services growth picks up in September, but quarterly pace weakest since 2022: HSBC PMI
New Delhi, October 6
India's services sector growth accelerated in September to its strongest pace in three months as domestic demand improved, though activity over the July-September quarter expanded at its slowest pace since early 2022, an HSBC survey showed.
The seasonally adjusted HSBC India Services PMI Business Activity Index rose to 55.2 in September from 54.1 in August, remaining above the 50 mark that separates expansion from contraction. However, the average reading for the second quarter of the fiscal year was the weakest since the three months to March 2022.
The September improvement was supported by stronger new business, which rose at the fastest pace in three months. Finance and insurance, along with consumer services, recorded the strongest expansion in both activity and sales.
Domestic demand remained a key support for the services economy, with companies reporting increased demand for digital solutions, food, insurance, loans, software, transportation, tours and travel.
External demand, however, showed signs of moderation. New export business continued to increase, supported by demand from Germany, the UAE, the UK and the US, but the pace of growth slowed to its weakest in nearly three years.
Employment also increased in September as stronger order books and projects in the pipeline encouraged companies to add staff. However, the pace of hiring eased from August, largely due to softer recruitment among real estate and business services firms.
Inflationary pressures meanwhile eased, offering some relief to service providers. Input-cost inflation fell to its weakest level since November 2025, with the slowdown seen across all four service categories covered by the survey. Companies that continued to report higher costs cited food supplies, fuel, insurance premiums, maintenance, software and technology resources.
The pace at which firms raised their selling prices also moderated and was the weakest since June.
"The PMI survey suggested that India's services sector continued to improve, supported by strengthening domestic demand," said Pranjul Bhandari, Chief India Economist at HSBC.
"At the same time, export business continued to expand, although the pace of growth slowed. Input-cost pressures on service providers eased to a 10-month low, reducing the need to raise selling prices," she added.
The broader private sector also gathered pace in September. The HSBC India Composite PMI Output Index rose to 55.9 from 54.3 in August, marking the strongest expansion since June. However, its quarterly average was also the weakest since the three months to March 2022, underscoring that the late-quarter improvement followed a relatively softer July-September period.
Business confidence among services companies improved to a three-month high, although it remained subdued by historical standards.
— ANI
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