India’s services sector growth touched a six-month high of 59.8 in May, boosted by healthy demand conditions, new client wins, and ongoing improvements in new business intakes, a monthly survey said on Wednesday (June 3, 2026).

The seasonally adjusted Hong Kong and Shanghai Banking Corporation (HSBC) India Services Purchasing Managers’ Index (PMI) Business Activity Index rose to 59.8 in May, from 58.8 in April, signalling the strongest rate of expansion since last November. 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.

In the PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction. “India’s services PMI signalled an expansion in business activity in May, supported by a continued rise in new business. External demand for India-provided services also grew at a faster pace, rebounding after a sharp decline in April. Input cost inflation eased, which in turn reduced pressure on selling prices,” said Pranjul Bhandari, Chief India Economist at HSBC.

Strengthening demand for services such as freight, digital solutions, e-commerce, entertainment and IT reportedly boosted new business growth during May. As a result, companies lifted activity to a greater extent and continued to add to payroll numbers.

However, growth of external demand remained below the 2025 average, the survey said, adding that the expansion in international orders was nevertheless solid, with firms citing gains from Australia, Canada, France, Germany, Hong Kong, Malaysia, the UAE and the U.K.

On the prices front, input prices across the service economy continued to increase at an above-trend pace during May. Survey participants reported having paid more for food, fuel, gas, labour and materials compared to April.

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In terms of jobs, Indian services companies signalled a further increase in payroll numbers. The overall rate of job creation was solid and the second-fastest in just under a year (behind April), but fewer than 7% of panellists signalled greater hiring, and the vast majority indicated no change in headcounts.

Regarding the 12-month outlook for business activity, services firms expect demand conditions to remain favourable and therefore support output. The overall level of confidence slipped to a three-month low and was below the historical trend. Meanwhile, the HSBC India Composite PMI Output Index continued to recover from March’s slowdown, rising from 58.2 in April to 59.3 in May. Composite PMI indices are weighted averages of comparable manufacturing and services PMI indices.

New orders placed with private sector companies rose at the quickest pace in six months, and the aggregate selling prices rose at the weakest rate since January. The HSBC India Services PMI is compiled by Standard & Poor’s (S&P) Global from responses to questionnaires sent to a panel of around 400 service sector companies.

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.