India Services Growth Accelerates in January

The HSBC India Services PMI edged down to 58.4 in February 2026 from 58.5 in January, pointing to a slightly slower but still strong expansion in services activity, preliminary estimates showed. While overall business activity softened marginally, services firms recorded a notable acceleration in new export orders, with international sales rising at the fastest pace since August 2025. However, domestic demand moderated, partly reflecting competitive pressures and cheaper service offerings elsewhere. Stronger export growth and rising backlogs encouraged companies to increase hiring, with employment expanding at a modest but faster pace. On the price front, input costs rose at the steepest rate in two-and-a-half years. In response, firms lifted selling prices at a quicker rate. Looking ahead, sentiment improved, with businesses expressing their strongest optimism in a year, supported by expectations of gains from investment and marketing efforts despite elevated cost burdens.

The HSBC India Services PMI was revised lower to 58.5 in January 2026 from a preliminary estimate of 59.3. However, the latest figure remained above the December reading of 58.0, which marked the softest expansion in 11 months, supported by faster growth in output and new business. Rising new orders prompted service providers to resume hiring staff, though job creation increased only marginally. On the price front, input cost inflation accelerated to a four-month high, driven by higher prices for eggs, electronic items, meat, paper, parts, and vegetables. Meanwhile, selling prices rose at the fastest pace in three months, as firms sought to better balance cost pressures and profitability. Looking ahead, business sentiment improved to a three-month high, supported by optimistic forecasts for efficiency gains, marketing efforts, and new client wins.

The HSBC India Services PMI increased to 59.3 in January 2026 from a final reading of 58.0 in December 2025, which marked the softest expansion in 11 months, preliminary estimates showed. The expansion in services activity was supported by faster growth in output, while new orders rose at a quicker pace amid strengthening demand conditions and aggressive marketing campaigns. Foreign orders also increased, driven mainly by demand from Asia, Australia, Europe, Latin America, and the Middle East. Meanwhile, employment was broadly stable. On the price front, input price pressures increased sharply. Output prices also rose as firms transferred higher costs to clients in an effort to protect margins.