India's Services Sector Growth Hits Three-Month High, PMI Rises to 55.2

The seasonally adjusted HSBC India Services PMI Business Activity Index rose to 55.2 in September from 54.1 in August, marking the fastest expansion since June.

New business also increased at its fastest pace in three months, with companies reporting stronger demand across areas including digital solutions, food, insurance, loans, software, transportation, tours and travel.

Finance and insurance, along with consumer services, recorded the strongest gains in activity and sales during the month.

HSBC India Chief India Economist Pranjul Bhandari said the services sector continued to improve on the back of strengthening domestic demand.

She noted that export business also continued to grow, although the pace of expansion moderated. At the same time, easing input-cost pressures reduced the need for service providers to increase their selling prices.

Despite the September improvement, average services activity during the July-September quarter remained below the previous quarter. The quarter also recorded the weakest performance since the three months ending March 2022, according to the data.

International demand for Indian services strengthened during September, with companies reporting increased business from Germany, the United Arab Emirates, the UK and the US.

However, growth in new export business slowed to a moderate pace.

Improving order books and projects in the pipeline supported further hiring by services companies during the month. Employment increased at a moderate pace, although the rate of job creation was slower than in August.

Input-cost pressures also eased, with the rate of inflation in input prices falling to its lowest level since November 2025.

Selling price inflation remained moderate and declined to its lowest level since June, reducing pressure on companies to raise charges.

Business confidence among services companies also improved, reaching a three-month high. Firms cited resilient demand and an increase in customer enquiries as factors supporting their optimism.

Meanwhile, the HSBC India Composite PMI Output Index, which covers both manufacturing and services, climbed to 55.9 in September from 54.3 in August.

The rise indicated that overall private-sector output in India expanded at its fastest pace since June.