January sees improvement in India`s services sector growth; PMI at 58.5
January 2026 saw a notable improvement in India’s services sector growth, led by quicker expansions in new business intakes and output. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index rose to 58.5 in January from 58.0 in December. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also surged to 58.4 in January as against 57.8 in December.
The survey report stated that the main source of new business gains was the domestic market, but international orders nevertheless rose solidly. Moreover, the pace of expansion was the most pronounced in three months. Rising intakes of new work prompted service providers in India to resume hiring in January. The pace of job creation was only marginal, however, as the vast majority of firms opted to leave workforce numbers unchanged amid sufficient resources for current requirements.
On the inflation front, input costs increased at the fastest pace since last September, albeit one that was moderate and below the long-run series trend. Output charges also rose to a greater extent during January, with the rate of inflation at a three-month high. Service providers sought to better balance cost rises and profitability. The overall increase was nevertheless mild in the context of historical data.
Further, cost pressures were by far most intense in the Consumer Services category, while the strongest increase in output charges was noted in the Finance & Insurance sector. Meanwhile, business confidence rose to a three-month high at the start of the final fiscal quarter. Among the factors supporting optimistic forecasts were efficiency gains, marketing efforts and new client wins.
