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India's Services Sector Growth Slows in March Despite Strong Global Orders

India's services sector remained in expansion territory in March, though the pace of growth softened to a 14-month low. The slowdown was driven by a moderation in domestic new business, partly offset by near-record growth in international orders. Despite the easing momentum, business confidence reached its highest level in nearly 12 years, and job creation accelerated to its fastest pace in months. However, firms faced steep input cost inflation, leading to selling prices rising at a seven-month high.

Key Points: India Services PMI Growth Eases in March, Job Creation Rises

  • Services PMI eases to 57.5
  • Strongest job creation since mid-2025
  • New export orders near record high
  • Input cost inflation at 22-month peak
2 min read

India's services sector stays in expansion in March, growth momentum eases

India's services sector expanded in March with strong export orders, but domestic growth momentum eased. Job creation hit a multi-month high.

"Output across India's service economy rose at the softest pace in 14 months during March - HSBC India Services PMI Report"

New Delhi, April 6

India's services sector continued to expand in March, supported by strong international orders and rising business confidence even as domestic new‑business growth eased, a report said on Monday.

The HSBC India Services PMI report compiled by S&P Global said that India Services PMI or the headline figure remained above its long‑run average of 54.4.

The seasonally adjusted HSBC India Services PMI Business Activity Index eased from 58.1 in February to 57.5 in March.

Firms reported increased job creation at the fastest pace since mid‑2025 and the strongest outlook for output in almost 12 years.

"While new business gains continued to underpin growth, according to panellists, output was constrained by the detrimental impact of the Middle East war on demand, market conditions and tourism," the report said.

Indeed, intakes of new work rose but the pace was softest since January 2025 at the end of the last fiscal quarter.

Softer increases in sales were noted in three of the four broad areas of the service economy, namely Finance & Insurance, Real Estate & Business Services and Transport, Information & Communication.

All four categories recorded quicker expansions in new export orders. Subsequently, overall growth in foreign sales neared a series peak, the firm noted.

"Output across India's service economy rose at the softest pace in 14 months during March, mirroring the slowdown in growth of new business intakes but comparing with a near‑record expansion in international orders," the report said.

Meanwhile, selling charge inflation quickened to a seven‑month high amid the steepest increase in input costs since June 2022.

The slowdown in total new order growth occurred in parallel to a pick‑up in output charge inflation. Prices charged for the provision of Indian services rose to the greatest extent in seven months during March and one that was above the long‑run series average.

- IANS

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Reader Comments

P
Priya S
The fastest job creation since mid-2025 is the best news here! As someone in the IT sector, I've seen hiring pick up. But the rising input costs and selling charges mentioned are a real concern. It feels like everything is getting more expensive.
R
Rohit P
The report clearly says the Middle East war is impacting demand and tourism. This is an external factor beyond our control, but it's hitting our growth. We need to diversify our export markets and boost domestic consumption to cushion such shocks.
S
Sarah B
Interesting data. The "strongest outlook for output in almost 12 years" is a very positive signal for business confidence. Even with a slight easing, being above the long-run average of 54.4 is solid. The Indian economy's resilience is impressive.
K
Karthik V
Finance, Real Estate, and Transport seeing softer sales increases is a point to note. These are backbone sectors. The government should look into policy measures to stimulate demand in these areas. The inflation in service charges is also pinching the common man's pocket.
M
Michael C
A balanced report. Growth is easing but still expansionary. The near-record expansion in international orders is the key takeaway for me. It suggests India is becoming a more integral part of global service supply chains, which is great for long-term stability.

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