India Services Growth Hits Three-Month High in September on Strong Home Demand

India's services sector growth reached a three-month high in September, driven by a sharp rise in new orders and strong local demand. The seasonally adjusted HSBC India Services PMI Business Activity Index climbed to 55.2 in September from 54.1 in August, showing the strongest upturn since June.

Growth Drivers And Exports

The expansion was pushed by higher demand across several areas, including digital solutions, food, insurance, loans, software, transportation, and tours and travel. Overseas demand also got better, with companies reporting gains from Germany, the UAE, the U.K. and the U.S. At the same time, the HSBC India Composite PMI Output Index increased to 55.9 in September from 54.3 in August, marking the strongest private sector output rise since June. S&P Global compiles these figures from responses sent to a panel of roughly 400 service sector companies. In PMI terms, any score above 50 represents expansion.

Employment And Costs

Better order books and upcoming projects led service providers to hire extra workers in September, although the hiring rate was softer than in August. Cost pressures eased at the end of the second fiscal quarter as input price inflation dropped to its weakest level since November 2025. This slowdown in cost pressures reduced the need for companies to raise their selling prices. Looking ahead, just under 16% of survey respondents expect output to go up over the next 12 months, while the rest expect no change.

Context

The Purchasing Managers' Index is a widely watched monthly survey that tracks business conditions across manufacturing and services. A reading above 50 points to economic growth, making these reports key indicators of business activity in the country.