India's services sector growth at 10-month high in June as price pressures ease: PMI

The Indian services sector ended the first fiscal quarter on a strong note with output and new orders rising at the fastest pace since August last year, aided by robust demand conditions and a softening of price pressures, a monthly survey showed on Thursday.

The seasonally adjusted HSBC India Services PMI Business Activity Index rose to a ten-month high of 60.4 in June from 58.8 in May. A reading above 50 indicates growth in activity.

“Indian service providers ended the first fiscal quarter on strong footing. Output and new order intakes rose at the fastest rates since August 2024, aided by another robust expansion in international sales and job creation,” the report said.

According to the survey, firms linked the upturn to positive demand trends and ongoing improvements in sales.

New business expanded at the quickest rate since August 2024, driven by continued domestic strength and a marked increase in new export orders.

Overseas demand particularly improved from Asian, Middle Eastern, and US markets.

Although growth in export orders eased to a three-month low, it remained among the strongest recorded since the series began in September 2014.

Sector-wise, finance & insurance topped growth rankings for both output and new orders, while real estate & business services saw the slowest expansions.

"The ongoing expansion of the Indian service sector had a positive impact on recruitment," the survey said.

"Employment rose for the thirty-seventh consecutive month in June, with the rate of job growth outpacing its long-run average despite slowing from May's record."

The rate of input cost inflation eased to a ten-month low, remaining below its historical average, as companies cited higher staff salaries and wages as the primary source of cost increases.

Despite easing from May, the rate of output charge inflation stayed above the series trend, with the sharpest uptick noted in finance & insurance.