NEW DELHI, November 4: Growth in India’s services sector picked up to a four-month high in October, while cost pressures eased to their lowest in more than six years, according to the HSBC India Services PMI compiled by S&P Global and released on Wednesday. The index rose to 55.8 from 55.2 in September, and the composite index, which includes manufacturing, rose to 56.2 from 55.9.
Key highlights
- Services PMI Business Activity Index: 55.8 in October, up from 55.2, the strongest growth in four months.
- Composite output index: 56.2, up from 55.9, the fastest rise in private-sector output in four months.
- New business grew at the fastest rate since June, led by the domestic market; all four broad service areas grew faster, led by finance and insurance.
- New export business grew only marginally, the weakest since February 2023.
- Input cost inflation fell to its lowest since August 2020, and prices charged rose at the slowest rate since June.
- Hiring slowed to the weakest pace in four months, and business optimism faded.
| Indicator | October 2026 | September 2026 |
|---|---|---|
| HSBC India Services PMI (business activity) | 55.8 | 55.2 |
| HSBC India Composite PMI (output) | 56.2 | 55.9 |
| HSBC India Manufacturing PMI (headline) | 54.7 | — |
The manufacturing figure was released on November 2; see our Asia manufacturing PMI report.
What the survey found
Firms said favourable demand, new client wins and advertising lifted new orders. Finance and insurance led the growth in both new business and output, while real estate and business services came last. Some firms reported paying more for electricity, labour, raw materials and transport, but overall input costs rose at a negligible pace that was well below the long-run trend. At the composite level, the rise in prices charged for goods and services was the softest since February 2022. The release noted that factory output growth slowed but stayed faster than growth in services.
Pranjul Bhandari, chief India economist at HSBC, said employment growth slowed to its weakest since June, “suggesting that some service sector businesses have sufficient capacity to meet current staffing requirements”. Data were collected from October 9 to 28.
Our calculation
- The services index rose 0.6 points in a month and the composite index 0.3 points.
- At 55.8, services activity is growing 5.8 points above the 50.0 no-change mark.
What it means
Strong home demand is carrying India’s service economy while overseas sales lose momentum. Softer cost and price pressures are good news for inflation. But slower hiring and fading optimism suggest firms are cautious about the months ahead, and weak export growth is worth watching for IT and business services.
What to watch
- October consumer price inflation data later this month.
- Whether export orders for services pick up again.
- Hiring trends in the November survey.
An office tower in DLF Phase 3, Gurugram. Image: Sahil Dhiman, CC BY-SA 4.0, via Wikimedia Commons. Photo source · Licence
Sources
The Business Desk covers markets, the economy, companies and personal finance. Stories are checked against at least two credible sources before publication.
