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India's Services PMI Hits 58.5 in Jan, Composite Index Rises to 58.4

India's services sector activity strengthened in January, with the HSBC Services PMI rising to a two-month high of 58.5. The Composite PMI, combining manufacturing and services, also increased to 58.4, signaling a sharp rate of overall economic expansion. Growth was driven by a steady influx of new orders, with the domestic market being the primary source and international orders also rising solidly. Firms reported increased optimism, higher hiring, and a moderate rise in input costs, led by items like eggs, electronic goods, and vegetables.

Key Points: India Services PMI Hits Two-Month High at 58.5 in January

  • Services PMI at two-month high
  • Composite PMI rises to 58.4
  • Domestic market drives new business
  • Finance & Insurance leads growth
  • Input costs rise at faster pace
3 min read

India Services PMI hits two-month high at 58.5 in January, composite index rises to 58.4

India's services sector activity strengthened in January with PMI at 58.5, while the Composite PMI rose to 58.4, signaling robust economic expansion.

"India's services PMI rose to 58.5 in January, up from 58.0 in December, signalling sustained momentum in the sector. - HSBC"

New Delhi, February 4

India's services sector activity strengthened in January, with the Services Purchasing Managers' Index rising to a two-month high of 58.5, while the Composite PMI, which combines manufacturing and services, increased to 58.4, according to data released by HSBC.

The seasonally adjusted HSBC India Services PMI® Business Activity Index, which is based on a single question assessing changes in business activity compared to the previous month, rose to 58.5 in January from December's recent low of 58.0. The latest reading was consistent with a historically sharp rate of expansion.

HSBC noted that January data showed the domestic market remained the main source of new business gains, although international orders also rose at a solid pace. The pace of overall expansion was the strongest in three months.

It stated "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".

It also mentioned that service providers across the country reported a recovery in growth during January, supported by quicker expansions in new business intakes and output. Firms were also more optimistic about the outlook and increased hiring during the month.

On the pricing front, input costs and selling charges rose at a quicker, though still moderate, pace.

Meanwhile, the HSBC India Composite PMI Output Index climbed from December's 11-month low of 57.8 to 58.4 in January. The reading signalled a sharp rate of expansion, supported by stronger growth in both manufacturing and services. Improved demand conditions across the two sectors also lifted overall sales, taking the pace of expansion to a two-month high.

HSBC also shared that similar to output trends, new orders increased at the fastest pace in two months, after growth had slipped to an 11-month low at the end of 2025. Companies cited stronger client interest and an improved online presence as key factors driving higher sales.

Segment-wise data showed that Finance and Insurance topped the growth rankings for both output and new orders, despite being the only segment to register slowdowns since last December.

Services firms reported higher prices for items such as eggs, electronic goods, meat, paper, parts and vegetables. Overall, input costs rose at the fastest pace since last September, although the increase remained moderate and below the long-run average.

The data also indicated broadly stable levels of outstanding business across the services sector. The seasonally adjusted index for pending workloads stood only marginally above the neutral 50.0 mark in January.

- ANI

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Reader Comments

A
Aman W
Good to see the momentum sustained. However, the article mentions input costs rising at the fastest pace since September. This inflation pressure needs to be watched closely by the RBI. A strong economy is good, but not if it prices out the common man.
R
Rohit L
Finance & Insurance leading the growth is a very positive sign. It shows confidence in the system. Hope this translates to better credit availability for MSMEs. The domestic demand story remains strong! 💪
S
Sarah B
As someone working in the IT services sector, I can feel this uptick. Project pipelines are looking healthier this quarter compared to the global slowdown worries last year. Cautiously optimistic!
K
Karthik V
The composite index rising is key. Manufacturing and services both firing gives a balanced growth picture. But they mentioned price rise in eggs, meat, vegetables... feels very real at the kirana store. Growth should not come at the cost of high food inflation.
M
Meera T
More optimistic outlook and increased hiring mentioned here is what we need to hear! After all, what is economic data if it doesn't lead to more jobs and better salaries for the youth? Hope this trend continues.

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