India's services growth rises to 3-month high in September; hiring growth eases

India's services activity expanded at its fastest pace in three months in September as stronger domestic demand lifted new orders, a monthly survey showed on Tuesday.

The HSBC India Services PMI, compiled by S&P Global, rose to 55.2 in September from 54.1 in August, marking the strongest expansion since June.

A reading above 50 indicates growth, while one below 50 signals contraction.

"India's services sector continued to improve, supported by strengthening domestic demand. At the same time, export business continued to expand, although the pace of growth slowed," said Pranjul Bhandari, Chief India Economist at HSBC.

New orders increased at their fastest pace in three months, with finance and insurance and consumer services recording the strongest gains in activity and sales.

Firms reported stronger demand for digital solutions, food, insurance, loans, software, transportation, tours and travel.

International demand for Indian services also improved, with companies reporting gains from Germany, the United Arab Emirates, Britain and the United States. However, growth in new export business slowed to its weakest pace in nearly three years.

Hiring continues

The improvement in order books and projects in the pipeline prompted service providers to hire additional staff in September.

The pace of job creation moderated from August, mainly because of softer hiring in real estate and business services.

Input-price inflation across the services sector slowed to its weakest level since November 2025, while the rate of increase in prices charged by companies eased to its lowest since June.

Firms cited higher prices for food supplies, fuel, insurance premiums, maintenance, software and technology resources where costs continued to rise.

The HSBC India Composite PMI Output Index, which covers both manufacturing and services, rose to 55.9 in September from 54.3 in August, indicating the strongest private-sector output growth since June.

However, the average composite growth in the second fiscal quarter was the weakest since the three months to March 2022. Aggregate sales also grew faster in September, but their performance over the quarter was the weakest since the end of 2021-22.

The survey showed that Indian services companies remained optimistic about the year ahead, supported by resilient demand and rising customer enquiries. Business confidence rose to a three-month high, although it remained subdued by historical standards.

The survey was conducted from September 7 to 28 among around 400 service-sector companies.