India’s services PMI at 11-month high in July 2025 on strong demand, including from abroad

Activity in India’s services sector stood at an 11-month high in July 2025, driven by strong demand, according to a private sector survey.

The HSBC India Services PMI Business Activity Index, which arrives at a score for business activity based on a single question asking how the level of business activity compares with the situation the month before, increased marginally to 60.5 in July from 60.4 in June. 

Where a score of below 50 denotes a contraction in activity, one above 50 shows an expansion. The relatively high score in July, thus, “signalled another sharp increase in output”, the report said. This is the highest score the index has achieved since August 2024.

“Sustained increases in new business intakes were identified by survey members as the main aspect behind output growth,” the report added. “According to them, advertising, demand buoyancy and new client onboarding all underpinned the latest upturn in new orders.”

Indian service providers also saw a stronger improvement in international demand for their services, with new work orders coming from Asia, Canada, Europe, the UAE and the U.S..

However, the report also highlighted two areas of caution. The first was to do with hiring.

“Although the upturn added pressure on firms’ capacity, hiring moderated,” the report noted. “July’s increase in employment was the slowest in 15 months, despite strengthening business confidence.” 

The second issue was to do with input prices, with both input costs and the resulting increase in output charges growing at faster rates in July than in June. This, however, could ease in the future, according to Pranjul Bhandari, chief economist at HSBC.

“On the price front, both input and output prices rose a tad faster than in June, but this could change going forward as indicated by the recent CPI and WPI prints,” Ms. Bhandari said in the report.