India Services Sector Growth Weakest Since 2022

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.

The HSBC India Services PMI was revised slightly higher to 57.4 in June 2026 from the preliminary estimate of 57.3 but remained below May's final six-month high of 58.9. Still, the latest reading signaled the softest growth since January 2025 due to a slower increase in output, while new order growth eased to its slowest pace in over two and a half years. However, foreign sales growth accelerated to the strongest pace in three months. Employment declined after solid job creation in April and May. On the price front, input costs rose, driven by higher electricity, food, fuel, and transportation costs. However, input cost inflation eased to a five-month low. Meanwhile, output price inflation remained slight, below its long-run average and the weakest since November 2025. Looking ahead, business sentiment faded.

The HSBC India Services PMI declined to 57.3 in June 2026 from May’s six-month high of 58.9, preliminary data showed. It was the weakest growth in the services sector since January 2025, as cost pressures and softening demand conditions curbed the latest upturn in business activity. New order growth eased, with some companies struggling to secure new work, as competitive pressures, rising fuel prices, and gas shortages were often cited as hindrances. However, foreign sales growth accelerated. Meanwhile, outstanding business volumes remained broadly unchanged. Employment increased, though at the slowest pace since December 2025. On prices, input and output price inflation moderated amid challenging demand conditions and competitive pressures. Looking ahead, business sentiment remained positive.