India’s dynamic services sector experienced a slight deceleration in its growth trajectory during September. A recent monthly survey, released on Monday, October 6, 2025, indicated that new business ventures and overall sector activities expanded at a somewhat reduced pace compared to the preceding month.
Specifically, the seasonally adjusted HSBC India Services PMI Business Activity Index recorded a dip to 60.9 in September. This marks a decrease from the impressive 15-year high of 62.9 observed in August, a moderation attributed to intensified market competition and strategic cost-management initiatives by businesses.
Despite this slight slowdown, the September Services PMI index remained significantly above the crucial 50.0 threshold. This continued strong performance signals that the sector experienced another substantial increase in output, affirming its ongoing robust health.
In the language of the Purchasing Managers’ Index (PMI), a score exceeding 50 signifies expansion within a sector, while a reading below 50 indicates contraction.
Pranjul Bhandari, Chief India Economist at HSBC, commented on the findings: “Although business activity in India’s services sector softened slightly from its August peak, the overall data doesn’t suggest a significant loss of growth momentum. Most indicators show a moderation, but the underlying strength remains.”
The survey also highlighted that a contributing factor to this easing of growth was a less robust improvement in global demand for Indian services.
While international sales continued to climb in September, their growth was the slowest recorded since March. Companies pointed to the availability of more affordably priced services from other regions as a key reason for this dip in export order growth.
Regarding prices, the report noted a modest inflationary pace, which was the slowest since March and generally aligned with the long-term average for the series. Similarly, the rates at which Indian service providers increased their prices also eased in September.
Furthermore, the pace of job creation within the services sector slowed in September. Employment saw a modest increase, with less than 5% of the surveyed companies reporting an uptick in hiring.
Encouragingly, business outlooks for future growth brightened in September, with overall positive sentiment reaching its highest level in six months.
Participants in the survey cited various positive factors expected to drive activity in the coming year, including enhanced advertising efforts, improvements in operational efficiency, plans for competitive pricing strategies, and potential tax relief.
Mr. Bhandari further elaborated, “The Future Activity Index climbed to its peak since March, reflecting a growing sense of optimism among service companies regarding their future business prospects.”
Broadly across India’s private sector, robust growth persisted, yet both new orders and international sales, along with business activity and employment, showed softer increases during September.
The HSBC India Composite PMI Output Index also decreased to 61.0 in September from 63.2 in August, marking the slowest expansion rate since June. Nevertheless, this figure remained comfortably above its historical average and the neutral 50.0 mark.
Composite PMI indices are calculated using weighted averages of the comparable manufacturing and services PMI indices, with the weights reflecting the relative economic contribution of each sector as indicated by official GDP data.
At the consolidated level for the private sector, total sales expanded at their slowest rate in three months. The survey also revealed that input costs and output charges increased at their slowest rates in two and three months, respectively.
The HSBC India Services PMI data is meticulously compiled by S&P Global, drawing insights from questionnaire responses submitted by a diverse panel of approximately 400 service sector companies.