India's Service Sector Growth Remains 'Strong', HSBC PMI At 58: Report

(MENAFN- IANS) New Delhi, Jan 6 (IANS) "India's service sector maintained a strong performance in December," even as HSBC India Services PMI Business Activity Index eased to 58 from 59.8 in November, 2025, said a report on Tuesday.

The index stayed well above the neutral level, as growth continued to be robust. A reading above 50 indicates economic expansion. The December figure was also well above the long-run reading of 55.

The report compiled by S&P Global said the rate of expansion in incoming new work and output eased compared to activity in the last 11 months as firms held back on hiring.

New work and export orders rose at above‐trend rates with gains noted from Asia, North America, the Middle East and the UK.

Companies reported quicker increases in input costs and output charges versus the previous month, though inflation rates remained below long‐run averages.

Growth in new orders and output were supported by competitive pricing, demand buoyancy and positive client interest. Firms, however, said that growth was constrained by a greater presence of alternative providers and cheaper services offered elsewhere.

"While India's service sector continued to perform well in December, 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.

The positive factor for India's service sector is the benign inflation environment, Pollyanna said, adding that if services firms continue to see only mild increases in their expenses, they should limit price hikes, thereby boost sales and create more jobs.

While recent rupee weakness may have driven import costs higher, it likely made exports more competitive. Notably, against the wider trend of slowing growth, services exports rose to a greater extent in December, the report added.

Looking ahead, private sector companies remained optimistic towards growth prospects, though the level of sentiment slipped to a 41-month low, it noted.

MENAFN06012026000231011071ID1110559973