The HSBC India Services PMI, compiled by S&P Global, fell to 58.9 in October from 60.9 in September — signalling the slowest pace of expansion since May. Despite the moderation, the index remained well above the 50-mark separating growth from contraction for the 51st consecutive month, indicating that underlying demand conditions remain resilient.
The report pointed to softer new business growth, which eased to a five-month low as floods, landslides, and rising competition
Business confidence slipped to a three-month low, while hiring activity stayed subdued, marking the joint-softest pace of job creation in 18 months.
However, there was some relief on the price front. Input costs rose at the slowest rate since August 2024, aided by Goods and Services Tax (GST) reductions. Firms subsequently raised output prices at a seven-month low, pointing to easing inflationary pressures.
Economists said the moderation in service sector activity, coupled with slower price increases, could reinforce expectations of a policy rate cut by the Reserve Bank of India, especially as retail inflation has already cooled to an eight-year low of 1.54% in September.
Meanwhile, the HSBC India Composite PMI — which tracks both manufacturing and services — also eased to 60.4 in October from 61.0 in September, marking a five-month low. The report noted that while service sector growth lost momentum, manufacturing output and new orders expanded at a quicker pace, cushioning the overall slowdown.
