January PMI figures: India’s services sector growth hits two-month high

India's services sector recorded a strong start to 2025 as the activity climbed to a two-month high in January, thanks to improving demand and firms expanded capacity.

The seasonally adjusted HSBC India Services PMI Business Activity Index climbed to 58.5 in January, up from 58.0 in December, reflecting faster growth in output and new business. In the PMI, readings above the 50 mark indicate expansion, while those below signal contraction.




Growth was supported by buoyant demand conditions, supported by gains in new orders and ongoing investment in technology. Service providers reported a quicker rise in business volumes and responded by adding staff, while sentiment around future activity also improved.

“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, including increased international demand from South and Southeast Asia,” said Pranjul Bhandari, chief India economist at HSBC.

The survey showed that new orders increased at the fastest pace in two months. Domestic demand remained the main contributor to growth, although international business also expanded at a solid rate. Respondents highlighted fresh work from clients based in Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand and Vietnam.

Service providers were increasingly positive about the outlook. “Business confidence climbed to a three-month high, supported by efficiency gains, effective marketing, and the acquisition of new clients. While input and output prices are rising, they remain fairly mild by historical standards,” Bhandari added.

Price pressures edged up during the month but stayed moderate overall. The sharpest cost increases were reported in the Consumer Services segment, while the strongest rise in selling prices was seen in the Finance & Insurance sector, according to the survey.

Broader private sector activity also strengthened in January. Faster growth in new orders and output supported employment gains and lifted confidence. The HSBC India Composite PMI Output Index rose to 58.4 from December’s 11-month low of 57.8.

Composite PMI indices are calculated as weighted averages of manufacturing and services indicators, with weights based on the relative contribution of each sector to GDP.

“The composite PMI also strengthened in January, reflecting solid demand growth across both manufacturing and services,” Bhandari said.

On employment, the survey noted that private sector jobs increased at the start of 2026 after remaining flat in December, with both manufacturing firms and service providers recording slight gains in staffing levels.