Momentum Builds: India’s Services Sector Hits 10-Month High on Surge in New Orders

Updated: July 03, 2025 23:45

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India’s services sector is riding a wave of expansion, with the HSBC India Services PMI Business Activity Index climbing to 60.4 in June from 58.8 in May. This marks the strongest growth in ten months, driven by a sharp rise in new business orders and sustained demand across domestic and international markets.

Key Highlights from the PMI Report

- New orders expanded at the fastest pace since August 2024, led by robust domestic demand and a steady rise in export orders
- Export growth was fueled by increased demand from Asian, Middle Eastern, and US markets
- The HSBC India Composite PMI Output Index rose to 61.0 in June, indicating the fastest private sector expansion in 14 months
- Employment in the services sector rose for the 37th consecutive month, although the pace of hiring slowed slightly from May’s record

Sectoral Trends and Price Dynamics

- Finance and insurance led the growth among service segments, while real estate and business services lagged
- Input cost inflation eased to a ten-month low, helping improve margins across most categories
- Output charge inflation also softened, with the slowest pace of price hikes in three months
- Consumer services faced the highest cost pressures, while finance and insurance saw the steepest rise in output charges

Business Sentiment and Outlook

- Despite strong performance, optimism among service providers dipped slightly, with only 18 percent forecasting growth over the next 12 months
- This marks the lowest level of confidence since mid-2022, reflecting caution amid global economic uncertainties
- Nonetheless, the sustained expansion in both services and manufacturing sectors signals resilience in India’s economic fundamentals

As India’s services sector continues to expand, the June PMI data underscores a healthy demand environment and improving cost dynamics—setting the stage for steady growth, even as sentiment remains cautiously optimistic.

Sources: Business Standard, The Hindu, Financial Express, MSN News, NDTV, WION News, Rediff Money News

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