India’s Services PMI rose to 55.2 in September from 54.1 in August, marking the fastest expansion in the services sector in three months, according to HSBC India PMI data released on Tuesday.
Key Highlights
- India’s Services PMI rises to 55.2 in September, marking the sector’s fastest expansion in three months.
- Stronger domestic demand, new orders and easing input costs supported India’s services sector growth during September.
The seasonally adjusted HSBC India Services PMI Business Activity Index pointed to a stronger expansion in September, supported by resilient domestic demand and a sharp increase in new business. The latest reading marked the strongest growth since June.
India’s Services PMI Rises to 55.2 in September
The improvement in India’s Services PMI came as service providers reported stronger demand across several segments, including digital solutions, food, insurance, loans, software, transportation, tours and travel.
Finance and insurance, along with consumer services, recorded the strongest increases in activity and sales during the month.
Pranjul Bhandari, chief India economist at HSBC said that India’s services sector continued to improve, supported by strengthening domestic demand.
However, the services sector’s average PMI reading for the July-September quarter remained below the previous quarter. The quarterly performance was also the weakest since the three months ended March 2022.
New Orders Rise at Fastest Pace in Three Months
New business received by Indian services companies increased sharply in September, recording its fastest growth in three months.
The rise in new orders indicates stronger underlying demand for services, with businesses reporting increased customer requirements across a range of sectors.
International demand also improved during the month, with companies reporting stronger business from Germany, the UAE, the UK and the US.
However, the growth in new export business slowed to a moderate pace.
Finance and Insurance Services Record Strongest Growth
The finance and insurance sector was among the strongest-performing areas within India’s services economy in September.
Consumer services also recorded significant increases in activity and sales, while demand for digital solutions, software, transportation and travel-related services remained supportive of overall growth.
Services Companies Continue Hiring in September
Improving order books and projects in the pipeline encouraged Indian services companies to increase hiring during September.
Employment growth was moderate, but slowed from the previous month of August.
The rise in employment continued, reflecting that firms were continuing to gear up for employment despite increased demand and growth in business activity.
Input Cost Inflation Falls to Lowest Level Since November 2025
Cost pressures eased further during September, with inflation in input prices falling to its lowest level since November 2025.
The moderation in input costs reduced pressure on service providers to increase their selling prices. Selling price inflation remained moderate and eased to its lowest level since June.
The softer cost environment could provide some relief to businesses while supporting relatively stable pricing for customers.
Business Confidence Hits Three-Month High
Business confidence among Indian service providers strengthened to a three-month high in September.
Firms cited resilient demand and rising customer enquiries as key factors supporting their optimism about future activity.
The improvement in confidence came alongside stronger new orders and continued hiring, although the slower quarterly performance indicates that the sector’s overall momentum remained below levels seen earlier in the year.
Also Read: India's Services PMI Rises to 54.1, But Growth at 4-Year Low
India’s Composite PMI Rises to 55.9 in September
The HSBC India Composite PMI Output Index, which combines manufacturing and services activity, increased to 55.9 in September from 54.3 in August.
The reading indicated that private-sector output expanded at its fastest pace since June.
The improvement in the composite index was supported by stronger services activity alongside the performance of the manufacturing sector.
India’s Services PMI Q3 Performance Remains Weaker Than Previous Quarter
All the same, the India's services sector had a lower average level of PMI activity in the July-September quarter than the previous quarter, despite the gradual improvement in September.
The quarterly average was the lowest since the three months to March 2022, suggesting that activity picked up in September but slowed in the quarter as a whole.
In summary, the September data suggested that demand in the services sector remained strong, with new orders for the sector increasing, and cost pressures easing, and business confidence improving in India's services sector.
