CHENNAI: India’s services sector expanded at a slower pace in September as demand growth eased slightly after months of robust performance. The HSBC India Services Purchasing Managers’ Index (PMI) fell to 60.9 from 62.9 in August, indicating a moderation in activity but still reflecting solid expansion above the 50-point threshold that separates growth from contraction.
The latest reading suggests that while business conditions remain favorable, momentum has cooled somewhat after the strong uptrend seen through mid-year. Companies reported softer inflows of new work and a slower rise in employment, though both continued to grow.
Analysts quoted in early reports said the deceleration likely reflects seasonal factors and a mild slowdown in export orders rather than any fundamental weakness. Domestic demand stayed firm, supported by services such as finance, transport, and consumer-focused activities.
Input cost inflation eased slightly compared to August, helping some firms maintain stable output prices. However, cost pressures from wages and raw materials remained higher than long-term averages.
Business confidence among service providers remained upbeat. Many firms cited expectations of stronger consumer spending and festive season demand in the months ahead as reasons for optimism.
Economists noted that even with the dip, India’s services PMI continues to outperform most major economies, underscoring the resilience of domestic consumption and business activity. Combined with solid manufacturing output, the overall composite PMI remains comfortably in expansion territory.
Overall, the September data points to a slight cooling in services growth but continued economic strength, suggesting India’s broader recovery remains on track heading into the final quarter of 2025.