India’s services sector expanded at its fastest pace in six months in May, supported by stronger demand, new client wins and growth in new business, according to the HSBC India Services PMI, S&P Global reported on Wednesday, 3 June.
The seasonally adjusted HSBC India Services PMI Business Activity Index rose from 58.8 in April to 59.8 in May.
A reading above 50 indicates expansion, while a reading below 50 signals contraction.
The report said demand improved across services such as freight, digital solutions, e-commerce, entertainment and information technology. This helped companies raise output and continue adding to payroll numbers.
New orders received by Indian service providers rose at the fastest pace in 6 months.
Export orders also increased, though the pace of growth remained below the average seen during calendar year 2025.
Companies reported international demand from markets including Australia, Canada, France, Germany, Hong Kong, Malaysia, the UAE and the UK.
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Cost pressures remained high across the services economy, but input cost inflation eased to a 4-month low. This helped keep selling price increases moderate, with charge inflation also easing to its lowest level since January.
Pranjul Bhandari, Chief India Economist at HSBC, said, “India’s services PMI signalled an expansion in business activity in May, supported by a continued rise in new business. External demand for India-provided services also grew at a faster pace, rebounding after a sharp decline in April. Input cost inflation eased, which in turn reduced pressure on selling prices.”
Employment in the services sector continued to rise in May.
The report said job creation remained solid and was the second-fastest in just under a year, behind April.
The HSBC India Composite PMI Output Index also improved, rising from 58.2 in April to 59.3 in May.
The composite reading showed quicker growth in both manufacturing and services activity.
Consumer services remained the strongest-performing segment, recording the fastest growth in new business and output among the monitored service categories.
The report also noted that services firms remained optimistic about the 12-month business outlook, supported by expectations of favourable demand conditions. However, the overall level of confidence slipped to a three-month low and stayed below its historical trend.
