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The growth of India’s services sector eased in September from the recent high in August, as new business and activity expanded at slower rates, according to a monthly survey released on Monday (October 6, 2025).
The seasonally adjusted HSBC India Services PMI Business Activity Index fell to 60.9 in September, from a 15-year high of 62.9 in August, amid competitive conditions and cost-control measures.
Notwithstanding the moderation, the September Services PMI index was well above the neutral mark of 50.0 to signal another substantial upturn in output.
In the Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.
“Business activity in India’s services sector eased in September from the recent high August level. Most trackers moderated, but nothing in the survey suggested there is a big loss in growth momentum in services,” said Pranjul Bhandari, Chief India Economist at HSBC.
As per the survey, part of the slowdown reflected softer improvements in international demand for Indian services.
External sales still rose in September, but did so to the least extent since March. Companies identified the supply of services at lower prices elsewhere as the main factor behind the slowdown in the growth of export orders.
On the price front, the report said that the pace of inflation was modest, the slowest since March and broadly in line with the long-run series average, as prices charged for the provision of Indian services likewise increased at a weaker rate in September.
According to the survey, job creation slowed during September. Employment rose at a modest pace, as fewer than 5% of monitored companies reported hiring growth.
Meanwhile, companies’ assessments of growth prospects improved in September, with the overall level of positive sentiment reaching a six-month high.
Survey participants identified several tailwinds to the year-ahead outlook for activity, including advertising, efficiency gains, plans to price competitively and tax cuts.
“… The Future Activity Index rose to its highest level since March, indicating strengthening optimism among services companies about business prospects,” Mr. Bhandari said.
Meanwhile, India’s private sector continued to experience robust growth, but there were softer increases in new orders, international sales, business activity and employment during September.
The HSBC India Composite PMI Output Index slipped to 61.0 in September, from 63.2 in August, indicating the weakest rate of expansion since June. The figure nevertheless remained comfortably above its long-run average and the neutral mark of 50.0.
Composite PMI indices are weighted averages of comparable manufacturing and services PMI indices. Weights reflect the relative size of the manufacturing and service sectors as per official GDP data.
At the composite level, total sales rose at the softest pace in three months, the survey said, adding that across the private sector, costs and charges increased at the slowest rates in two and three months, respectively.
The HSBC India Services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies.
Published – October 06, 2025 01:06 pm IST
