India’s Services Growth Eases to Four-Month Low in October: HSBC PMI

India’s services sector expanded at the slowest pace in four months in October, with the HSBC India Services PMI easing to 58.9, down from 60.9 in September, according to data compiled by S&P Global. The composite PMI, which tracks both manufacturing and services output, slipped to 60.4 from 61.0.

“Competitive pressures and heavy rains contributed to the sequential slowdown in services activity,” said Pranjul Bhandari, Chief India Economist at HSBC. “India’s composite PMI eased largely due to the services sector’s softer performance.”

Although the index remains well above the 50-mark that separates expansion from contraction, the moderation signals a mild cooling in activity amid weather-related disruptions and rising competition. Firms reported healthy demand, stronger client footfall, and GST-related relief as factors supporting growth. “GST reforms helped curb price pressures,” the report said, noting that input costs and output charges rose at the slowest pace in 14 and seven months, respectively.

Employment continued to rise, helping reduce backlogs for the first time in nearly four years. Export orders also grew solidly, though at the slowest rate since March, indicating some softening in international demand. Despite the moderation, business confidence remained upbeat, with firms expecting further growth over the next 12 months.

Manufacturing Sector Also Gains Momentum

India’s manufacturing sector gathered pace in October, supported by GST relief, productivity gains, and technology investments, data published earlier this week showed. The HSBC India Manufacturing PMI rose to 59.2 from 57.7 in September. “Robust end-demand fuelled expansions in output, new orders, and job creation,” Bhandari said.

Manufacturers continued to increase purchases of raw materials and semi-finished goods to supplement production and build inventories, amid signs of easing cost inflation. Price pressures were broadly unchanged in manufacturing, contrasting with a marginal slowdown among service providers.

Economists said the October PMI readings indicate India’s growth momentum remains intact, underpinned by strong domestic demand and employment even as external conditions soften.