India’s services sector activity strengthened in January, with the Services Purchasing Managers’ Index (PMI) rising to a two-month high of 58.5, while the Composite PMI increased to 58.4, according to data released by HSBC.
The seasonally adjusted HSBC India Services PMI Business Activity Index rose from 58.0 in December to 58.5 in January, indicating a sustained and historically sharp expansion in activity. The index is based on a single question that measures changes in business activity compared with the previous month.
HSBC said domestic demand remained the primary driver of new business growth, although international orders also expanded at a solid pace. Overall expansion was the strongest in three months.
“India’s services PMI rose to 58.5 in January, up from 58.0 in December, signalling sustained momentum in the sector. Robust output growth was driven by a steady influx of new orders,” HSBC said.
Service providers across the country reported a recovery in growth during the month, supported by faster expansions in new business intakes and output. Firms also expressed improved optimism about the outlook and stepped up hiring in January.
On the pricing front, both input costs and selling prices increased at a quicker, though still moderate, pace.
Meanwhile, the HSBC India Composite PMI Output Index climbed from an 11-month low of 57.8 in December to 58.4 in January. The reading signalled a sharp expansion, supported by stronger growth in both manufacturing and services. Improved demand conditions across the two sectors also lifted overall sales, pushing the pace of expansion to a two-month high.
HSBC noted that new orders rose at the fastest pace in two months after growth had slipped to an 11-month low at the end of 2025. Companies cited stronger client interest and an improved online presence as key factors behind higher sales.
Segment-wise data showed that Finance and Insurance led growth in both output and new orders, despite being the only segment to record a slowdown since December.
Services firms reported higher prices for items such as eggs, electronic goods, meat, paper, parts and vegetables. Overall input costs rose at the fastest pace since last September, though the increase remained moderate and below the long-term average.
The data also showed broadly stable levels of outstanding business across the services sector. The seasonally adjusted index for pending workloads remained only marginally above the neutral 50 mark in January. (ANI)
