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India’s service sector activity growth eased in the month of July as weaker sales growth and inflationary pressures restricted the latest upturn in business activity. As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index declined to 55.5 in July from 59.2 in June. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- fell to 56.6 in July from 58.2 in June.

There was a negligible increase in service sector employment across India. The rate of job creation was fractional and broadly similar to June. The vast majority of firms left payroll numbers unchanged amid a lack of need to raise workforces. Indeed, capacity pressures remained only mild, with the average level of outstanding business rising at a slight pace that was the weakest in three months.

On the inflation front, services companies witnessed a further increase in their average expenses during July, with food, fuel, materials, staff, retail and transportation cited as the key sources of inflationary pressures. Input costs rose sharply, though at the slowest pace in five months. Ongoing cost increases led companies to lift their own selling prices in July. Despite the rate of inflation softening from June's near five-year peak, the latest rise was solid and the seventeenth in successive months.