Noida, Apr 6 (APAC Media): India’s services sector recorded its slowest growth in 14 months in March, as easing domestic demand and rising input costs tempered business activity, according to Monday’s release of the HSBC India Services Purchasing Managers’ Index (PMI).
The index slipped to 57.5 from 58.1 in February, marking the weakest expansion since January 2025.
Although the March reading stayed comfortably above the 50 threshold that indicates expansion, it underscores a slowdown in activity across major segments of India’s services sector. The index, which has reflected continuous growth for over four years, now points to a cooling trend as companies grapple with higher costs and weaker domestic demand.
The respondents to the survey cited slower new business growth and difficult market conditions, with the ongoing conflict in West Asia dampening consumer sentiment, tourism, and certain service sub-sectors.
However, international demand offered some relief, as new export orders surged at one of the fastest rates in recent years, buoyed by strong demand from key global markets.
Therefore, cost pressures intensified in March, with input prices rising at their fastest rate in nearly four years due to higher expenses for fuel, transportation, food, and labour. Service providers increased their selling prices at the quickest pace in seven months, but the hikes were insufficient to fully offset rising costs, leaving profit margins under pressure.
The services sector saw employment growth accelerate for the third consecutive month, reaching its strongest level since mid‑2025. Firms also reported higher business confidence, driven by expectations of stronger demand and improved market conditions in the months ahead.
Economists noted that the slowing PMI readings point to potential headwinds for India’s economic growth toward the end of the current fiscal year, though the overall expansion in the economy remains intact.
The slowdown in services, combined with softer manufacturing growth, dragged the HSBC India Composite PMI Output Index down to 57.0 in March from 58.9 in February, marking the slowest overall expansion in the private sector in nearly three and a half years.
News Agency Inputs
