The Indian services sector growth was recorded at 60.5 in July, marking a high of 11 months, according to a monthly survey.
The seasonally-adjusted HSBC India Services PMI Business Activity Index that was shared by the company on Tuesday showed that the growth had been supported by new export orders and rise in overall sales – the best rate of expansion since August, 2024.
In June, the PMI was at 60.4 in June.
A Purchasing Managers' Index (PMI) of more than 50 means expansion, while a score below 50 denotes contraction.
“At 60.5, the services PMI indicated a strong growth momentum, led by a pick-up in new export orders," said Pranjul Bhandari, Chief India Economist at HSBC.
Also Read: Manufacturing sector records 16-month-high growth as sales rise
New business intakes from Asia, Canada, Europe, the UAE, and the US were the main triggers for the growth spurt in the sector, the survey indicated, mainly influenced by efficiency gains, improved marketing, innovation in technology, and a growing online presence.
The Indian service providers welcomed the improved international demand for their services and stated optimism about their expectations for output in the year ahead.
Price-wise, both input costs and output charges rose at faster rates than in June, reflecting greater cost burdens and demand strength.
“On the price front, both input and output prices rose a tad faster than in June but this could change going forward as indicated by the recent CPI and WPI prints,” Bhandari said.
The Consumer Price Index (CPI)-based retail inflation, meanwhile, has remained below 4 per cent since February. It was at 2.1 per cent in June.
The wholesale price inflation (WPI), however, has turned negative after a gap of 19 months, declining 0.13 per cent in June.
Curiously, despite the services growth, hiring was moderate in July, with the month marking the slowest increase in 15 months.
“The rate of job creation was only slight, broadly converging to its long-run average. Fewer than 2 per cent of companies took on additional staff, with the vast majority indicating no change from June,” the survey cited.
Meanwhile, the HSBC India Composite PMI Output Index was up fractionally from 61.0 in June to 61.1 in July, indicating a sharp rate of expansion that was the quickest since April 2024.
Composite PMI indices are weighted averages of comparable manufacturing and services PMI indices. Weights reflect the relative size of the manufacturing and service sectors, according to official GDP data.
The PMI results for July revealed mixed signs regarding the performance of the Indian private sector.
"New orders and output expanded at quicker rates, while job creation receded and business optimism faded. Meanwhile, inflationary pressures gathered pace," the survey said.
The HSBC India Services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies.
Meanwhile, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) started its three-day deliberations on Monday to decide the next bi-monthly monetary policy.
The six-member panel, led by RBI Governor, Sanjay Malhotra, is scheduled to announce the next policy rate on August 6, although analysts believe there will most likely be a pause in the rate easing cycle and that the central bank may go in for a status quo this time and wait for more macro data, especially in the wake of the US imposing 25 per cent tariff on Indian imports from August 7.
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