India's Services Sector Shows Continued Growth in March Despite Slowdown
Synopsis
India's services sector has shown resilience in March with continued growth driven by international orders, despite a notable easing in domestic new-business growth. This report highlights the sector's performance and the challenges it faces.
Key Takeaways
India’s services sector expanded in March despite domestic growth slowing.
Job creation increased at the fastest pace since mid-2025.
New export orders saw quicker expansions .
Output charge inflation reached a seven-month high .
The PMI index remained above its long-term average of 54.4 .
New Delhi, April 6 (NationPress) – In March, India’s services sector demonstrated continued expansion, bolstered by robust international orders and an increase in business confidence, despite a slowdown in domestic new-business growth, according to a report released on Monday.
The HSBC India Services PMI report, produced by S&P Global, indicated that the India Services PMI or the main index remained above its long-term average of 54.4.
The seasonally adjusted HSBC India Services PMI Business Activity Index slipped from 58.1 in February to 57.5 in March.
Companies reported a surge in job creation at the quickest rate since mid-2025, alongside the most optimistic outlook for output in nearly 12 years.
“While the gains in new business continued to drive growth, panelists noted that output was hampered by the adverse effects of the Middle East conflict on demand, overall market conditions, and tourism,” the report stated.
Although new work intakes increased, the pace was the slowest since January 2025 at the close of the last fiscal quarter.
A mild increase in sales was observed in three of the four broad sectors of the service economy: Finance & Insurance, Real Estate & Business Services, and Transport, Information & Communication.
All four segments saw faster growth in new export orders, with overall growth in foreign sales approaching a series high, according to the firm.
“Output across India’s service sector increased at the slowest rate in 14 months during March, reflecting the deceleration in new business intake growth, yet contrasting with a near-record rise in international orders,” the report added.
Meanwhile, inflation in selling prices accelerated to a seven-month peak, coinciding with the steepest rise in input costs since June 2022.
The reduction in overall new order growth paralleled a rise in output charge inflation. The prices charged for the provision of Indian services rose at the highest level in seven months during March, exceeding the long-term series average.
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Point of View
I observe that the resilience of India's services sector amid challenges like the Middle East conflict signals a noteworthy strength in international demand. While domestic growth is slowing, the overall outlook remains cautiously optimistic, highlighting the sector's adaptability.
NationPress
11 Jul 2026
Frequently Asked Questions
What is the current status of India's services sector?
India's services sector continues to expand, showing strong international demand despite a slowdown in domestic new-business growth.
What factors are affecting India's services growth?
The growth is supported by international orders and business confidence, but it faces challenges from the Middle East conflict and market conditions.
How has job creation been affected in the services sector?
Job creation in the services sector is at its fastest pace since mid-2025, indicating strong hiring trends.
What does the PMI report indicate?
The PMI report indicates that while overall growth remains strong, the pace of new business intake has softened.
How are selling prices and input costs trending?
Selling price inflation has reached a seven-month high, alongside a significant rise in input costs since June 2022.
