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India’s service sector activity fell in the month of January, as growth was curbed by the escalation of the pandemic. Moreover, job shedding continued and business confidence took a hit. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index eased to 51.5 in January from 55.5 in December. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- also fell to 53.0 in January from 56.4 in December.

The report further noted that new work intakes increased further at the start of the year, taking the current sequence of expansion to six months. That said, the rate of growth was only slight and the weakest over this period. Besides, companies became increasingly worried that growth would be harmed by the intensification of the pandemic, the reintroduction of restrictions and inflationary pressures.

On the inflation front, January data pointed to a stronger increase in expenses among service providers, with the overall rate of inflation climbing to its highest since December 2011. Prices charged for the provision of services in India continued to increase at the start of the year, with many companies suggesting that additional cost burdens were transferred to consumers. Despite quickening from December, the overall rate of output price inflation was moderate and in line with its long-run average.