Services PMI at 11-month low in December on lower new orders and output

Expansion in India’s services sector slowed to a 11-month low in December 2025 due to slackening new work orders and output, according to a private sector survey.

The HSBC India Services PMI Business Activity Index, which seeks to determine how the level of business activity compares with the situation a month before, fell from 59.8 in November to 58.0 in December. This was the lowest reading since January 2025.

“Although India’s service sector maintained a strong performance in December, several of the survey’s measures retreated as 2025 drew to a close,” the report said. “Rates of expansion in incoming new work and output eased to the slowest in 11 months, with companies refraining from recruiting additional staff.” 

The report added that, while firms remained upbeat about growth prospects, the overall sentiment fell to its lowest level in nearly three-and-a-half years.

“While India’s service sector continued to perform well in December, the retreat in several survey indicators as 2025 ended may suggest a moderation in growth heading into the new year,” Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said in the report.

However, she added that what could work in the service sector companies’ favour is the current benign inflation environment.

“If services firms continue to see only mild increases in their expenses, they should be better positioned to compete and limit price hikes, thereby boosting sales and creating more jobs,” she said.

Notably, the report said that the recent trend of increasing hiring in the sector since June 2022 came to an end in December 2025. 

“One factor that prevented firms from recruiting additional staff was a lack of pressure on their operating capacities,” the report said.