India services growth eases to 11-month low in December as new business softens: PMI

India’s services sector continued to expand in December, but growth in activity and new business slowed to an 11-month low as 2025 drew to a close, a private survey showed on Tuesday.

The seasonally adjusted HSBC India Services PMI Business Activity Index fell to 58.0 in December from 59.8 in November, marking the slowest rate of expansion in 11 months. However, the index remained well above the neutral 50 mark, indicating a substantial increase in output.

“The retreat in several survey indicators as 2025 ended may suggest a moderation in growth heading into the new year,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, which compiles the survey.

The survey showed that growth in new orders eased to the weakest pace in nearly a year, even as demand conditions remained supportive.

Export orders, however, grew at a faster pace than in November, supported by demand from Asia, North America, the Middle East and the UK.

Business confidence about activity in 2026 remained positive but slipped for a third consecutive month to its lowest level in nearly three-and-a-half years, weighed down by market uncertainty and concerns over exchange-rate movements, the survey showed.

The survey also showed that hiring momentum came to a halt in December, ending a trend of job creation that began in June 2022.

Input costs increased at a faster pace than in November, driven by higher expenses for building items, chemicals, medical supplies, salaries, vegetables and office maintenance fees. However, the rate of inflation remained among the softest seen in over five years.

“What bodes well for the outlook is the benign inflation environment. If services firms continue to see only mild increases in their expenses, they should be better positioned to compete and limit price hikes, thereby boosting sales and creating more jobs,” Lima said.

Meanwhile, private sector activity as a whole also moderated in December.

The HSBC India Composite PMI Output Index slipped to 57.8 from 59.7 in November, the weakest expansion since January 2025, though it remained well above its long-run average.

Growth in new orders softened to a 25-month low at the composite level, while job creation stalled amid slower expansion among manufacturers and marginal job shedding in the services sector.