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India’s service sector growth eased but remained in the expansion zone in the month of September, as the loosening of COVID-19 restrictions supported an improvement in market conditions and overall demand. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index stood at 55.2 in September from 56.7 in August. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- stood at 55.3 in September, from 55.4 in August.

Buoyed by signs of improvements in underlying demand, Indian service providers took on additional staff during September. The increase in employment ended a nine-month sequence of job shedding, but was marginal overall as some panellists indicated having sufficient workforces to deal with their workloads. The report further said that travel restrictions continued to weigh on international demand for Indian services. New export business contracted for the nineteenth month in a row, and at a sharp rate that was the quickest since May.

On the price front, there was another increase in firms' expenses, but the rate of inflation subsided. Selling prices rose again, albeit only marginally. Amid reports of higher fuel, material, retail and transportation prices, average cost burdens faced by Indian service providers rose further during September.