India’s services sector regained momentum in November, with business activity expanding at a faster pace after a brief slowdown in October, according to the HSBC India Services PMI report released on Wednesday.
The Services PMI Business Activity Index rose from 58.9 in October to 59.8 in November, signalling a “historically sharp expansion” driven by stronger new business inflows.
Stronger demand, softer price pressures
The report shows that demand conditions improved meaningfully, with companies recording a sharp rise in new business intakes, outpacing October and staying above the long-run average. Export business—while still expanding—grew at its slowest pace in eight months, constrained by global competition and cheaper services offered in other markets.
One of the most notable takeaways was a significant easing in cost pressures. Input price inflation dipped to its lowest level since August 2020, leading to only a “negligible uptick” in output charges as firms refrained from passing on higher costs to customers.
Employment steady; optimism softens
Service providers added jobs in November, though the pace remained modest and similar to the last two months. Firms reported no major pressure on operational capacity, with backlogs remaining broadly unchanged.
However, business confidence slipped, with companies citing concerns over competition and possible disruptions from state elections. Nevertheless, the overall outlook remains positive, supported by expectations of continued demand and cautious pricing strategies.
Composite PMI remains strong
India’s private sector activity also stayed resilient. The Composite PMI Output Index stood at 59.7, slightly lower than October’s 60.4, reflecting a cooling in factory output even as services activity picked up.
Overall, the latest PMI data point to a robust services economy supported by strong domestic demand, easing inflation, and stable employment—setting a steady tone midway through the third fiscal quarter.
