Is India's Service Sector Growth Still Robust? HSBC PMI Indicates 58
Synopsis
India's service sector shows resilience with a PMI of 58 in December, despite a slight decline from November. The report indicates robust growth and optimism for the future, though challenges remain. Discover the key factors driving this growth and what it means for the economy moving forward.
Key Takeaways
PMI Index: Stands at 58, indicating strong service sector growth.
Inflation: Remains below long-term averages, creating a favorable environment.
New Orders: Increased due to competitive pricing and demand.
Hiring: Firms are cautious, impacting job growth.
Export Growth: Service exports rose despite broader economic slowing.
New Delhi, Jan 6 (NationPress) India's service sector demonstrated a robust performance in December, even though the HSBC India Services PMI Business Activity Index dipped to 58 from 59.8 in November 2025, as reported on Tuesday.
The index remained well above the neutral mark, indicating that growth continued to be strong. A reading exceeding 50 signifies economic expansion. The December value was notably above the long-term average of 55.
The report by S&P Global pointed out that the rate of growth in incoming new work and overall output slowed compared to the previous 11 months as companies moderated their hiring.
New work and export orders increased at above-trend rates, with notable gains from Asia, North America, the Middle East, and the UK.
Businesses reported faster rises in input costs and output prices compared to the prior month, although inflation rates remained below long-term norms.
New orders and output growth were bolstered by competitive pricing, steady demand, and positive client interest. However, firms indicated that growth was hindered by an increased presence of alternative providers and lower-priced services available elsewhere.
“While India’s service sector continued to perform admirably in December, the decline in several survey metrics as 2025 concluded may indicate a moderation in growth as we enter the new year,” stated Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
Pollyanna noted that a favorable inflation environment for India's service sector could allow firms to limit price increases, thereby boosting sales and creating more jobs, provided they only experience mild expense increases.
Although recent rupee depreciation may have raised import costs, it has likely made exports more competitive. Remarkably, amidst the broader trend of slowing growth, service exports saw significant increases in December, the report added.
Looking forward, private sector companies remain optimistic about growth prospects, although sentiment has dipped to a 41-month low, the report highlighted.
Point of View
It’s crucial to recognize that while India's service sector is currently thriving, the slight downturn in key indicators raises valid concerns about future growth. The underlying strength remains, but we must remain vigilant as we approach the new year, ensuring that we support sectors that can drive sustained economic success.
NationPress
10 May 2026
Frequently Asked Questions
What is the current HSBC India Services PMI?
The current HSBC India Services PMI is 58, indicating strong growth in the service sector.
How does the PMI index relate to economic growth?
A PMI index reading above 50 indicates economic expansion, while readings below 50 suggest contraction.
What factors are affecting India's service sector growth?
Factors include competitive pricing, demand stability, and the presence of alternative providers offering lower services.
What is the outlook for India's service sector?
Private sector companies remain optimistic about growth, despite a dip in sentiment to a 41-month low.
How does inflation impact the service sector?
A stable inflation environment allows service firms to limit price increases, potentially boosting sales and job creation.
