India’s services sector witnessed a slight growth in April, according to the HSBC India Services Purchasing Managers’s Index (PMI).
The PMI, compiled by S&P Global, rose to 58.7 in April from 58.5 in March.
The increase was fueled by a sharp jump in new business volumes and a significant expansion of international demand since July 2024.
Business volumes and international demand surge
Demand boost
The PMI serves as a key indicator of economic activity, with values above 50.0 indicating growth and below signaling contraction.
New business volumes soared in April, extending the trend seen over the last two months.
International demand also witnessed strong growth, with export orders increasing at their quickest pace since July 2024.
Finance and insurance sector leads growth
Sector performance
The finance and insurance sectors were the top performers in April, clocking the highest growth rates for both output and new orders.
In order to meet the rising client demand, service providers increased their workforce numbers for a 35th consecutive month.
The pace of job creation accelerated from March and surpassed the long-term average.
Input cost inflation eases, selling prices rise
Price trends
On the pricing front, input cost inflation eased to its lowest in six months.
Companies capitalized on strong demand conditions to pass on costs, raising their selling prices at a faster pace than in March.
This easing of price pressures has given the Reserve Bank of India room to lower its key repo rate by 50 basis points this year, with potential further cuts expected soon.