India services PMI at 5-month high in April on domestic demand, logistics boost

India’s services sector activity accelerated to a five-month high in April, driven by strong domestic demand and higher logistics activity as firms shifted sourcing away from overseas suppliers amid the West Asia conflict, a monthly survey showed on Wednesday.

The seasonally adjusted HSBC India Services PMI Business Activity Index rose to 58.8 in April from 57.5 in March, the fastest expansion since November 2025.

The survey showed output and new business inflows expanded at quicker rates during the month, aided by strong customer demand, competitive pricing and rising e-commerce activity.

“India’s services PMI climbed to a five-month high of 58.8 in April. Activity and new orders strengthened, even as new export orders eased, suggesting that demand is rotating from overseas markets to domestic consumers amid the Middle East conflict,” said Pranjul Bhandari, Chief India Economist at HSBC Holdings plc.

In the Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

According to survey participants, transport and relocation-related services particularly benefited from a shift from international to domestic suppliers amid the ongoing conflict in West Asia.

The survey noted that consumer services led the expansion in output and new orders, followed by transport, information and communication services.

However, growth in international demand weakened sharply during the month.

The New Export Business Index fell to its second-lowest level in more than a year, as firms cited the West Asia conflict and subdued inbound tourism for softer overseas demand.

Companies reported higher expenses for food items such as cooking oil, eggs, meat and vegetables, as well as gas and labour costs.

The survey also highlighted shortages of gas as an added pressure on operating expenses.

“Input cost inflation moderated but remained elevated, while output price inflation stayed subdued, indicating that some firms are absorbing higher costs rather than passing them on,” Bhandari said.

Firms passed on only part of the higher costs to customers, resulting in a moderate increase in selling prices. Output charge inflation eased to a three-month low in April.

Business confidence remained positive regarding growth prospects over the next 12 months, supported by expectations of stronger demand, marketing efforts and rising client enquiries. However, the level of positive sentiment fell from March, dampened by worries surrounding the West Asia crisis and cost pressures.

Services companies also stepped up hiring in April, recruiting short-term staff and junior-level trainees to handle rising workloads. Employment growth was recorded across all four broad areas of the services economy covered by the survey.

The increase in staffing levels helped firms reduce outstanding business volumes for the first time in four months.

India’s composite PMI, which combines manufacturing and services activity, rose to 58.2 in April from 57.0 in March, indicating renewed momentum across the economy.But the rise was among the slowest in around two-and-a-half years.