India’s Services PMI Inches Up to 58.7 in April, Job Creation Up but Business Confidence Eases

The growth of business activity in the Indian service sector accelerated slightly in April after experiencing a slowdown in March. Services Purchasing Managers' Index (PMI) for April 2025, compiled by S&P Global, rose to 58.7 as compared to 58.5 recorded in March. The headline figure was above its long-run average of 54.2.

"This regained momentum was largely driven by a quicker increase in new order inflows, which also underpinned a faster expansion in employment. Alongside this positive trend, capacity pressures continued to build, with unfinished work rising solidly," the report said.

A reading above 50 signals sector expansion, while a reading below 50 indicates contraction, and 50 reflects no change. Indian companies continued to benefit from improved international demand for their services, with Asia, Europe, the Middle East and the US particularly cited as sources of strength.

"New export orders gained momentum after taking a breather in March, accelerating at its fastest pace since July 2024. Margins improved as cost pressures eased and prices charged rose at a faster pace. Though firms remained optimistic about future growth, their confidence waned slightly," said Pranjul Bhandari, Chief India Economist at HSBC.

Indian services companies increased their workforce numbers for the thirty-fifth consecutive month in April. Moreover, the pace of job creation was marked and quicker than in March. Despite the rise in staffing levels, firms reported another monthly increase in unfinished work.

Although service providers expressed optimism regarding activity growth, they downgraded expectations. The overall level of business confidence was at its lowest in close to two years.

Higher Sales and Output

The latest data showed a modest acceleration in growth of aggregate output, as signalled by the Composite PMI Output Index, rising from 59.5 in March to 59.7 in April. New business volumes across the private sector also rose at the fastest pace in eight months, helped by a pick-up in growth across the service economy.

Furthermore, the report highlighted that both manufacturing firms and their services counterparts registered faster expansions in new export orders. At the composite level, the rate of growth was at a nine-month high.