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 India's dominant services industry grew faster in March amid strong demand, according to a private business survey that also showed employment increased at the fastest rate in seven months and export business expanded at a record pace.

The final HSBC India Services Purchasing Managers' Index, compiled by S&P Global, rose to 61.2 last month from February's 60.6, confounding a preliminary reading for a fall to 60.3.

That put the reading above the 50-mark separating growth from contraction for a 32nd consecutive month.

"India's services PMI rose in March, following a small dip in February, on the back of strong demand that spurred sales and business activity," said Ines Lam, economist at HSBC.

While buoyant domestic demand and favourable economic conditions drove up new business, exports jumped at the quickest pace since the sub-index was included in the survey in September 2014.

That encouraged firms to increase hiring at the fastest rate since August. That is good news for a country with millions of entrants to the workforce every year.

The outlook for the coming year remained optimistic, although last month's reading showed the future activity sub-index had slipped to a four-month low as there were some concerns surrounding competitive pressures.

Rising input costs coupled with robust demand led firms to pass on the increase to clients, resulting in prices charged climbing at the strongest rate since July 2017.

"Input costs rose at a faster rate, yet service providers were able to broadly maintain margins by charging higher output prices," added Lam.

High prices could mean the Reserve Bank of India would keep its repo rate at 6.50% for a longer period.

Faster expansion in services activity, alongside a manufacturing industry growing at the fastest pace in 16 years in March, pushed the HSBC final India Composite PMI Index to an eight-month high of 61.8 from the previous month's 60.6 and higher than a preliminary reading of 61.3.