India’s services PMI recorded its fastest expansion in four months in October 2026, supported by stronger demand, higher new business inflows and improving business activity. The seasonally adjusted HSBC India Services Purchasing Managers’ Index (PMI) Business Activity Index increased to 55.8 in October from 55.2 in September, indicating continued growth in the sector.
Key Highlights
- India’s services PMI climbed to 55.8 in October, recording the sector’s strongest expansion in four months.
- Stronger new orders supported activity, while slower hiring and weaker export growth indicated cautious business sentiment.
However, employment growth moderated to its weakest pace since June, while the expansion in international sales slowed to its lowest level in nearly four years. The survey also indicated that input and output cost pressures eased during the month, offering some relief to service providers.
India’s Services PMI Growth Driven by Higher New Orders
New business inflows were the key driver of the improvement in India's services PMI. Order books were strengthened by favourable demand conditions and by new clients, and successful advertising campaigns, according to those who responded to the survey.
Pranjul Bhandari, HSBC's chief India economist, commented on the latest figures as overall demand stayed fairly strong in October. New export orders, however, saw the slowest growth since February 2023.
The PMI score above 50 indicates expansion in business activity, and below 50 means contraction. The October reading of 55.8 thus indicates that India's services sector continued to grow, albeit at a slightly faster rate than September.
Input and Output Cost Pressures Ease in October
Cost pressures on services moderated in October, according to service providers. Input prices and selling prices rose again although at a slower rate than in September.
The moderate rise in input and output prices signals some easing of inflationary pressures, Bhandari said. The moderation may provide some businesses with more flexibility in the way to cover operating expenses, but the survey still shows an increase in costs.
Employment Growth Slows to Four-Month Low
Despite stronger business activity and new orders, employment growth moderated to its weakest level since June.
The slower pace of hiring suggests that some service sector companies may have sufficient staffing capacity to meet current business requirements. Businesses remained cautiously optimistic about the outlook, but their recruitment activity reflected a more measured approach.
Growth in international sales also weakened, with new export orders recording their slowest expansion in nearly four years. This points to a difference between resilient domestic demand and softer growth in overseas business.
Also Read: India's Services PMI Rises to 55.2 in Sept on Stronger Domestic Demand
India’s Composite PMI Reaches Four-Month High
The composite PMI for the private sector in India, a measure of manufacturing and services activity, rose to 56.2 in October compared to 55.9 in September. The reading showed the largest increase in private sector production in four months.
New business inflows across the combined manufacturing and services sectors also accelerated, reaching their strongest growth rate since June. However, employment generation softened and business confidence weakened compared with the previous month.
The survey also showed costs were less of a problem in both manufacturing and services, bringing the overall rate of inflation to its lowest level in 11 months.
S&P Global creates the HSBC India Services PMI by surveying around 400 service sector companies. The composite PMI is made up of manufacturing and services readings, and the weights accorded to each sector reflect their respective contributions to official GDP growth data.
