India services PMI climbs to 59.8 in May on strong new business growth
Synopsis
India's services engine fired harder in May, with the PMI climbing to 59.8 and new orders at a six-month peak. Export demand rebounded after April's slump, and input cost pressures eased to a four-month low — a rare combination that gives both firms and the RBI some breathing room heading into the June review.
Key Takeaways
HSBC India Services PMI rose to 59.8 in May 2025 from 58.8 in April.
New orders expanded at the fastest pace in six months , led by freight, digital, e-commerce, entertainment and IT.
New export business rebounded, with gains from Australia, Canada, France, Germany, Hong Kong, Malaysia, the UAE and the UK .
Input cost inflation eased to a four-month low; selling-price inflation was the softest since January.
Job creation was the second-fastest in nearly a year, but fewer than 7% of firms reported greater hiring.
India's services PMI rose to 59.8 in May 2025 from 58.8 in April, lifted by strengthening demand across freight, digital solutions, e-commerce, entertainment and IT, the HSBC India Services PMI data showed on Wednesday. The acceleration in new business prompted firms to ramp up activity and continue adding to payrolls.
Key Numbers from the May Print
The headline index expanded for yet another month, with new orders placed with Indian service providers rising at the fastest pace in six months — a clear move away from the slowdown recorded in March. The reading sits firmly in expansion territory, well above the 50-mark that separates growth from contraction.
Export Demand Rebounds
New export business returned to growth after a sharp drop in April, though the pace trailed both total sales and the average seen during the 2025 calendar year. Firms reported solid international demand, with fresh orders flowing in from Australia, Canada, France, Germany, Hong Kong, Malaysia, the UAE and the UK, according to the survey.
What HSBC's Chief India Economist Said
'India's services PMI signalled an expansion in business activity in May, supported by a continued rise in new business. External demand for India-provided services also grew at a faster pace, rebounding after a sharp decline in April. Input cost inflation eased, which, in turn, reduced pressure on selling prices,' said Pranjul Bhandari, Chief India Economist at HSBC.
Cost Pressures Ease to Four-Month Low
Cost pressures remained historically elevated but receded to their lowest level in four months, allowing for only a moderate increase in selling prices — the softest such rise since January. The rate of charge inflation eased to a four-month low and broadly matched its long-run average.
Hiring Steady but Narrow
Payrolls rose for another month, with the rate of job creation logging its second-fastest pace in nearly a year, behind only April. That said, fewer than 7 per cent of surveyed panellists reported greater hiring, with the vast majority signalling no change in headcounts — a reminder that services-led growth is yet to translate into broad-based job creation.
What to Watch Next
The June composite print and any RBI commentary on growth-inflation dynamics will be closely tracked, especially as easing input costs offer some breathing room on the policy front.
Point of View
Export rebound, softer cost pressures — but the hiring data tells the real story. With fewer than 7% of firms adding headcount despite multi-month highs in orders, services growth continues to be productivity-led, not jobs-led. That gap matters: India's services sector cannot be a true growth engine for the labour market if order books expand while payrolls stay flat. The RBI will welcome the cost-side easing, but the broader employment puzzle remains unsolved.
NationPress
19 Jul 2026
Frequently Asked Questions
What is India's services PMI for May 2025?
India's HSBC Services PMI rose to 59.8 in May 2025 from 58.8 in April, signalling a stronger expansion in business activity. Any reading above 50 indicates growth in the sector.
Why did the services PMI rise in May?
The rise was driven by stronger new business growth across freight, digital solutions, e-commerce, entertainment and IT. New orders expanded at the fastest pace in six months, and external demand rebounded after a sharp drop in April.
Which countries drove export growth for Indian services?
Firms reported new export orders from Australia, Canada, France, Germany, Hong Kong, Malaysia, the UAE and the UK. The expansion in international orders was solid, though it trailed the pace of total sales.
What did the PMI show on jobs and inflation?
Payrolls grew at the second-fastest pace in nearly a year, but fewer than 7 per cent of surveyed firms reported greater hiring. Input cost inflation eased to a four-month low, and selling-price inflation was the softest since January.
