Services sector activity hits 4-month high in October as business conditions improve cautiously

India’s services sector activity recorded the strongest pace of expansion in four months in October as demand buoyancy fuelled growth in business activity and new orders amid easing cost pressures, a monthly survey said on Wednesday (November 4, 2026).

Companies were cautiously optimistic about the outlook, and they lifted jobs to the least extent in four months. The latest expansion in international sales was the weakest in almost four years.

The seasonally adjusted HSBC India Services PMI Business Activity Index rose from 55.2 in September to 55.8 in October, indicating the strongest pace of growth for four months.

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

“India’s services PMI rose to 55.8 in October, a four-month high, as business conditions improved cautiously. Although overall demand remained fairly strong, new export orders recorded the slowest pace of expansion since February 2023,” Pranjul Bhandari, Chief India Economist at HSBC, said.

Survey participants identified new business growth as the main driver behind the rise in output, the survey said, adding that favourable demand conditions, new client wins and successful advertising boosted new order intakes.

On the prices front, there was a substantial decline in cost pressures. “Input and output prices continued to rise, but at a slower pace than in the previous month, signalling some relief from inflation pressures,” Bhandari said.

Employment growth also slowed to its weakest pace since June, suggesting that some service sector businesses have sufficient capacity to meet current staffing requirements, she said.

Companies were, however, cautiously optimistic about the outlook, and they lifted jobs to the least extent in four months.

Meanwhile, India’s composite PMI increased to 56.2 in October, from 55.9 in September, marking the fastest rise in aggregate output in four months and reflecting healthy business activity.

“New business intakes at the composite level also expanded at a quicker rate, one that was the most pronounced since June. Yet, job creation softened, and businesses were less upbeat towards growth prospects than they were in September,” the report said.

Cost pressures receded at manufacturing firms and their services counterparts, dragging down the aggregate rate of inflation to an 11-month low.

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.

S&P Global compiles the HSBC India Services PMI from responses to questionnaires sent to a panel of around 400 service sector companies.