New orders push India’s services sector to fastest growth since November

India’s services sector growth touched a six-month high in May, supported by healthy demand conditions, new client wins and continued improvements in new business intakes, according to a monthly survey released on Wednesday.

The seasonally adjusted HSBC India Services PMI Business Activity Index rose to 59.8 in May from 58.8 in April, signalling the strongest rate of expansion since last November.

The HSBC India Services PMI Business Activity Index is based on a single question asking how the level of business activity compares with the situation the month before.

HSBC’s India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, increased to 59.8 in May from 58.8 in April and was higher than the preliminary estimate of 58.9. A reading above 50.0 indicates growth. India’s services PMI has remained above that threshold since mid-2021.

New business, a key measure of demand, rose to its highest level since November 2025, driven by activity in e-commerce, entertainment and information technology.

Export orders also increased, although only slightly after falling to a five-month low in April. The pending U.S. trade deal continued to create uncertainty.

Hiring activity continued during the month, though the pace of recruitment eased slightly. Fewer than 7 per cent of firms surveyed reported new recruitment, indicating that the headline expansion has not yet translated into broad-based job creation across the services sector.

On the price front, input cost inflation eased for a second consecutive month after reaching a 45-month high in March. The moderation provided some relief to firms, while the prices charged sub-index fell to a four-month low.

Despite the strong headline reading, the business outlook index slipped to 61.9 from 62.3, marking its second consecutive monthly decline. The figure also remained below its historical average, suggesting firms are becoming more cautious about future growth prospects.

The broader private sector economy also gathered momentum. The Composite PMI, which combines services and manufacturing activity, rose to 59.3 in May from 58.2 in April, its highest level in six months.