The HSBC India Services Business Activity Index was at 59.3 in December 2024 and 61.8 in January 2024.
“India’s services sector lost growth momentum in January, although the PMI remained well above the 50-breakeven level,” said Pranjul Bhandari, chief India economist at HSBC.
New business intakes rose at the slowest pace since November 2023, “curbing the upturn in business activity,” the survey noted.
Favourable demand conditions, new business wins and investment in technology led to output growth, the survey respondents noted. However, some firms reported constraints due to a fall in customer numbers.
International sales reached a five-month high, with firms noting gains from Asia, Europe, the Middle East and the Americas. “New export business partly countered the downtrend and continued to rebound from a dip in late-2024, in line with official data which showed India’s services exports shining in December and capturing a larger share of global trade,” said Bhandari. Job creation also rose, marking its fastest pace since December 2005, according to the survey.In contrast, manufacturing sector activity rose to a six-month high of 57.7 in January, according to figures released earlier this week.Service sector expenses climbed due to higher staff costs and rising food prices. “As a result of rising cost burdens and demand resilience, prices charged for the provision of Indian services increased further at the start of 2025,” the survey said.
Looking ahead, service providers remained optimistic about business activity growth over the next 12 months.
