India's Services Sector Sees Significant Growth: What You Need to Know

In September, India's services sector experienced a notable surge, reaching a three-month high in growth driven by increased domestic demand and new orders. The HSBC India Services PMI rose to 55.2, indicating robust expansion. Despite this growth, the quarterly average fell short of previous periods, marking the slowest growth since March 2022. The report highlights a positive outlook for the sector, with firms optimistic about future activity and job creation. Key drivers include heightened demand for digital solutions and international services. Explore the full article for detailed insights into this significant economic trend.

By Narendra Chaudhary Oct 6, 2026, 12:06 IST

Strong Growth in India's Services Sector

New Delhi: The growth of India's services sector reached a three-month peak in September, driven by a notable rise in new orders and bolstered by increasing domestic demand, according to a recent monthly report.

The seasonally adjusted HSBC India Services PMI Business Activity Index climbed to 55.2 in September, up from 54.1 in August, marking the most robust growth since June.

Despite this positive trend, the quarterly average for the services sector did not surpass the previous period's performance. The report indicated that growth during the second fiscal quarter was the slowest since the three months ending in March 2022.

In PMI terminology, a score above 50 indicates expansion, while a score below signifies contraction.

S&P Global compiles the HSBC India Services PMI based on feedback from approximately 400 service sector companies.

The survey highlighted that the growth in India's services sector was fueled by heightened demand for digital solutions, food services, insurance, loans, software, transportation, and travel.

Additionally, there was an uptick in international demand for Indian services, with respondents noting increased business from Germany, the UAE, the UK, and the US.

"The PMI survey indicated ongoing improvements in India's services sector, supported by stronger domestic demand. Export business also continued to grow, albeit at a slower pace," stated Pranjul Bhandari, Chief India Economist at HSBC.

On the employment front, the rise in order volumes and ongoing projects led service providers to hire additional staff in September, although the hiring rate was lower than in August.

Cost pressures eased towards the end of the second fiscal quarter, with input price inflation dropping to its lowest level since November 2025.

"Input-cost pressures on service providers have decreased to a 10-month low, which has lessened the necessity to increase selling prices. The outlook remains optimistic, with service providers expressing improved expectations for future activity for the second month in a row," Bhandari added.

Looking ahead, Indian services firms are optimistic about the upcoming year, buoyed by steady demand and an increase in customer inquiries. Nearly 16 percent of respondents anticipate an increase in output over the next 12 months, while the rest expect stability.

In addition, the HSBC India Composite PMI Output Index rose to 55.9 in September, up from 54.3 in August, indicating the strongest growth in private sector output since June.

Composite PMI indices are calculated as weighted averages of the manufacturing and services PMI indices, reflecting the relative sizes of these sectors based on official GDP data.

The report noted that the revival of job creation in the manufacturing sector, along with sustained growth in service providers, contributed to increased employment at the composite level.