India Services Sector Growth Weakest Since 2022

The HSBC India Services PMI increased to 54.5 in August 2026 from 53.3 in the previous month, which was the weakest expansion since early 2022, and above market forecasts of 53.8, according to preliminary estimates. Still, the latest reading signaled accelerating growth, with new orders continuing to rise, though at a softer rate, while employment increased. On the price front, input prices rose at a faster rate, while output inflation also accelerated, highlighting increased efforts to pass through costs to customers. Looking ahead, business confidence strengthened amid hopes of improved market conditions.

The HSBC India Services PMI was revised slightly higher to 53.3 in July 2026 from the preliminary estimate of 53.1 but remained well below June's final reading of 57.4. Still, the latest reading signaled the weakest expansion in business activity since early 2022, as output and new order growth slowed amid softer demand, competitive pressures, and fewer new enquiries. New business inflows rose at the weakest pace since February 2022. However, new export orders remained a bright spot, accelerating on stronger demand from the UAE, UK, and US. Employment improved modestly, with service providers adding to payrolls at a faster pace after job creation slowed to a six-month low in June. On the price front, input cost inflation eased to its lowest since January, though selling charges rose at the fastest pace since April, pushing output price inflation higher. Lastly, business confidence weakened to a seven-month low despite expectations of improved demand and market conditions.

The HSBC India Services PMI declined to 53.1 in July 2026 from a final 57.4 in the previous month, preliminary estimates showed. It was the softest expansion in the services sector since February 2022, as growth in both output and new orders slowed, with the rates of expansion retreating sharply from June to their weakest levels in 53 months. However, foreign sales growth accelerated. Employment increased modestly after declining in the previous month. On the price front, input cost inflation accelerated, driven by higher fuel, labour, materials, and transportation costs. Meanwhile, output price inflation accelerated due to higher input costs. Looking ahead, business sentiment weakened.