India services activity expands in August, pace of growth cools to over 4-year low: PMI

India’s services activity expanded in August, supported by stronger output and new business, even as the overall pace of growth was the second-slowest recorded since March 2022, a monthly survey said on Thursday (September 3, 2026).

The seasonally adjusted HSBC India Services PMI Business Activity Index rose from 53.3 in July to 54.1 in August, as demand conditions remained supportive and new business inflows continued to rise.

The rate of expansion recorded in August was the second-weakest since March 2022, amid subdued bookings, strong competition and reduced transport operations.

The HSBC India Services PMI Business Activity Index is based on a single question asking how the level of business activity compares with the situation the month before.

“India’s services activity expanded faster in August. Growth was supported by stronger output and new business, although the overall pace was still among the weakest seen in over four years, with some firms citing subdued bookings, competition and reduced transport operations,” said Pranjul Bhandari, chief India economist at HSBC.

Firms nevertheless continued to hire, with job creation reaching a 15-month high, while price pressures picked up only modestly.

“Employment increased at a marked rate, with job creation reaching a 15-month high. Price pressures picked up only modestly: input cost inflation edged up slightly, while prices charged rose at the fastest rate since March, as firms passed on higher operating costs,” Ms. Bhandari said.

Companies reported higher spending on digital platforms, electricity, inputs, labour, marketing and regulatory requirements.

Meanwhile, international demand continued to support growth. New export orders rose solidly and at a similar rate to July, with companies reporting gains from clients in markets including Australia, Brazil, Canada, Japan, Malaysia, Singapore, Sri Lanka and the UAE.

Confidence about the year-ahead outlook was broadly unchanged from July and stayed below its long-run average.

Service providers remained hopeful that market conditions and demand would improve, with technology adoption and new enquiries also supporting optimism.

The HSBC India Composite PMI Output Index stood at 54.3 in August, the second-weakest since February 2022. Goods producers noted a slowdown in growth, whereas service providers registered a quicker upturn.

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.

“An acceleration in growth of services activity offset a slowdown in manufacturing and left the pace of private sector growth unmoved in August. However, quicker expansions in aggregate employment and new order volumes were recorded,” the survey said.

The HSBC India Services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies.