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India’s services sector activity improved during the month of June amid a stronger rise in new orders and an unprecedented expansion in international sales. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index rose to 60.5 in June from 60.2 in May. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also surged to 60.9 in June as against 60.5 in May.

The survey report noted that new orders received by Indian service providers continued to increase in June, extending the current sequence of expansion to nearly three years. The pace of growth was sharp, faster than in May and well above its long-run average. Besides, positive client appetite encouraged service providers in India to recruit additional staff at the end of the first fiscal quarter. The pace of job creation was marked and the strongest in 22 months. 

On the inflation front, average input prices rose at a below-trend rate, however, and one that was the softest in four months. Fewer than 5% of services companies opted to share additional cost burdens with their clients by lifting selling prices in June, resulting in only a moderate rate of charge inflation. The uptick was the slowest since February. Further, service providers remained confident of a rise in business activity over the course of the coming 12 months, with nearly 23% of panellists expressing optimism.