India’s services sector hits 11-month high in July on strong demand

HSBC Services PMI rises to 60.5; new business and overseas orders boost activity despite slower hiring

August 7, 2025

A score above 50 indicates expansion, with July’s figure signalling a sharp increase in output

Strong demand, advertising efforts, and new client onboarding drove the upturn in business activity

International orders strengthened, with demand from Asia, Canada, Europe, the UAE, and the U.S.

Hiring growth slowed to its weakest pace in 15 months, despite rising business confidence

India’s services sector activity accelerated to an 11-month high in July 2025, fuelled by robust demand conditions, according to the HSBC India Services PMI Business Activity Index. The index inched up to 60.5 in July from 60.4 in June, its highest level since August 2024.

The PMI score, based on a survey of service sector firms, indicates expansion when above 50 and contraction when below it. July’s reading reflected another sharp increase in output, supported by sustained growth in new business orders. Survey participants pointed to stronger advertising, buoyant demand, and onboarding of new clients as key drivers of the upturn.

Service providers also reported a stronger inflow of international business, with new orders coming from markets in Asia, Canada, Europe, the UAE, and the U.S.

However, the report flagged two concerns. The first was a slowdown in hiring: employment growth in July was the weakest in 15 months, despite the sector’s positive momentum. The second was inflationary pressure, as both input costs and output prices rose more quickly than in June.

Experts noted that while price growth was slightly faster in July, recent consumer and wholesale price index trends suggest cost pressures could ease in the coming months.

Source: The Hindu

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