India’s services industry saw its fastest expansion in three months in September, supported by increased domestic demand and a recovery in export orders, according to HSBC’s PMI data.
India’s services sector gathered pace in September, with a private survey showing the fastest expansion in three months as new orders strengthened and overseas demand improved. HSBC’s India Services Purchasing Managers’ Index rose to 55.2 from 54.1 in August, keeping the sector comfortably above the 50-point mark that separates growth from contraction and extending the run of expansion to a 62nd straight month.
The improvement was broad-based, with higher demand flowing through areas such as digital solutions, food, insurance, loans, software, transport, and travel. New business increased at the quickest rate in three months, while finance and insurance, alongside consumer services, recorded the strongest gains among the main service categories tracked by the survey.
Export demand also improved, but the pace of growth in new overseas orders slowed to a moderate rate and was the weakest in nearly three years. Hiring continued as firms worked through fuller order books and a healthier pipeline of projects, although employment rose only at a moderate pace and more slowly than in August. Business confidence edged higher for a second month, but remained subdued by historical standards.
Price pressures eased as the month ended, with input-cost inflation dropping to its softest level since November 2025. Where costs did rise, companies pointed to more expensive food, fuel, insurance, maintenance, and technology-related inputs. Some firms passed part of those increases on to clients, but final charges rose only modestly and at the slowest pace since June.
“The PMI survey suggested that India’s services sector continued to improve, supported by strengthening domestic demand. At the same time, export business continued to expand, although the pace of growth slowed,” said Pranjul Bhandari, chief India economist at HSBC. The services reading broadly matched a recovery in manufacturing, where the HSBC index climbed to a seven-month high of 55.1, lifting the composite output index to 55.9 from 54.3 in August. Even so, business daily Business Standard said the average performance for July to September was still the weakest quarterly showing since early 2022, underlining that the rebound, while solid, has not fully shaken off earlier softness.
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