India’s services sector growth falls to 5-month low in October on competitive pressures, heavy rains: PMI

India’s services sector growth witnessed the slowest pace of expansion in five months in October, as competitive pressures and heavy rains in parts of the country led to a slower increase in output, according to a monthly survey released on Thursday (November 6, 2025).

The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 60.9 in September to 58.9 in October, indicating the slowest pace of expansion since May.

Notwithstanding the moderation, the October Services PMI index was comfortably above both the neutral mark of 50 and its long-run average of 54.3.

In the Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

“India’s services PMI softened to 58.9 in October, which represented the slowest pace of expansion since May. Competitive pressures and heavy rains were cited as contributors to the sequential slowdown,” Pranjul Bhandari, Chief India Economist at HSBC, said.

While factors like demand buoyancy and GST (Goods and Services Tax) relief reportedly led to an improvement in operating conditions, competition and heavy rains constrained growth, as per the HSBC India Services PMI, compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies, said.

The international demand for Indian services improved further, as signalled by another increase in external sales. The rate of expansion was solid, though the weakest since March, as per the survey.

Meanwhile, monitored firms suggested that the GST reform curbed price pressures. Input costs and output charges rose at the slowest rates in 14 and seven months, respectively.

Going forward, companies were strongly confident of a rise in business activity over the next 12 months.

Amid reports of efforts to support rising new-business intake, meet delivery deadlines, and maintain reliable services, companies recruited additional staff in October.

Meanwhile, the combined output of India’s manufacturing and service sectors continued to expand sharply in October, but growth lost momentum. Falling from 61 in September to 60.4, the HSBC India Composite PMI Output Index indicated the softest increase since May.

“India’s composite PMI fell on a sequential basis from 61 in September to 60.4 last month, largely due to the slowdown in the services sector,” Mr. Bhandari said.

Composite PMI indices are weighted averages of comparable manufacturing and services PMI indices. Weights reflect the relative size of the manufacturing and service sectors according to official GDP data.