Strong Growth Continues With Robust New Orders
India’s services sector maintained its strong growth momentum in January 2026, with the HSBC India Services Purchasing Managers’ Index (PMI) rising to 58.5, marking a two-month high and a rebound from December’s 58.0. A PMI reading above 50 signals expansion in the sector, indicating sustained business activity and growth.
Driving Forces: Domestic and International Demand
The latest PMI data highlights a notable expansion in new business intake and output, driven primarily by strong domestic demand. However, international orders also increased solidly, with new business gains reported from countries such as Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand, and Vietnam.
Service providers noted that greater client interest, improved marketing efforts, and enhanced technological investments helped accelerate growth. These factors also contributed to improved sales performance across the sector.
Confidence Improves to Three-Month High
Business sentiment strengthened in January as service firms expressed higher confidence levels, reaching a three-month peak. According to industry experts, this uptick in optimism was supported by efficiency gains, acquisition of new clients, and expanding market opportunities.
Job Creation and Price Trends
Private sector employment increased during January after a period of stagnation in December. Although job creation remained modest, the rebound reflects renewed hiring efforts among both service and manufacturing firms.
On the price front, input costs and selling charges rose moderately, with the most significant pressure seen in the consumer services category. Despite this, output prices remain historically mild.
Composite PMI Reflects Broad Economic Growth
The HSBC India Composite PMI, which includes both services and manufacturing data, also strengthened in January, rising from 57.8 in December to 58.4, signifying broad-based growth in India’s key economic sectors.
