India’s Services Economy Picks Up Pace, September PMI Rises to 55.2

New Delhi, Oct 6: India’s services sector ended September on a stronger note, with business activity picking up pace as improving demand and a rise in new orders helped companies maintain steady growth. The HSBC India Services Purchasing Managers’ Index (PMI) climbed to 55.2 in September from 54.1 in August, marking a three-month high. A reading above 50 indicates expansion, signalling that the sector continued to grow despite a challenging global environment. The latest improvement was largely driven by stronger new business, reflecting continued demand for services across several parts of the economy. Domestic demand remained an important support for companies, helping offset some moderation in overseas business. The broader private-sector economy also showed improvement. The HSBC India Composite PMI rose to 55.9 in September from 54.3 in August, pointing to a stronger performance across both manufacturing and services. Domestic demand keeps businesses moving India’s large domestic market continues to provide an important cushion for service providers. Consumer spending, financial services, digital businesses, transport and other service activities have helped companies maintain their growth momentum. While international demand for Indian services continued to expand, export growth moderated during the month. This makes the resilience of domestic demand particularly important for businesses looking to maintain growth in the months ahead. Cost pressures ease Another positive development was the moderation in input-cost pressures. Service companies reported a slower increase in operating costs, with input-cost inflation easing to its lowest level in 10 months. The softer cost environment could provide some relief to businesses and limit the need for sharp increases in prices. For consumers, this could also help keep price pressures under control. A cautiously positive outlook Despite the stronger September performance, the services sector faced some challenges during the July-September quarter. The average PMI for the quarter was weaker than in previous quarters, while employment growth also moderated. Businesses also remained somewhat cautious about the year ahead, reflecting uncertainty in global markets and external demand. Even so, the September numbers offer a positive signal for India’s growth story. With domestic demand holding firm, services activity improving and manufacturing also showing signs of resilience, the private sector enters the final part of the year with renewed momentum. The latest PMI reading therefore presents a steady and encouraging picture of India’s services economy, with domestic demand continuing to play a key role in supporting business activity and overall economic growth.