India services PMI rises to 58.5 in January, hits two-month high

India’s services sector growth climbed to a two-month high in January, supported by faster expansion in new business intake and output, with companies also adding staff, according to a monthly survey released on Wednesday.

The seasonally adjusted HSBC India Services PMI Business Activity Index rose to 58.5 in January, up from December’s recent low of 58.0, mainly driven by demand buoyancy, new business gains and tech investment.

In Purchasing Managers’ Index (PMI) terminology, a reading above 50 indicates expansion, while a figure below 50 signals contraction.

“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.

Service providers reported faster growth in both new business intake and output. The survey noted that firms were also more optimistic about the outlook and hired additional staff.

New orders increased at the quickest pace in two months. While the domestic market remained the primary source of growth, international orders also recorded a solid rise.

Survey participants cited new business gains from clients in Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand and Vietnam.

Service providers were also more upbeat about future activity.

“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.

On pricing, the survey recorded quicker — though still moderate — increases in input costs and selling charges.

Cost pressures were most intense in the Consumer Services category, while the strongest increase in output charges was observed in the Finance & Insurance sector.

Meanwhile, India’s private sector registered faster increases in new orders and output during January, supporting job creation and strengthening business confidence.

The HSBC India Composite PMI Output Index rose from December’s 11-month low of 57.8 to 58.4 in January.

Composite PMI indices are weighted averages of manufacturing and services PMI data, with weights reflecting the relative size of the two sectors based on official GDP figures.

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

On employment, private sector jobs increased at the start of 2026 after stagnating in December. The survey noted slight rates of job creation at both manufacturing firms and services companies.