India’s services sector activity eased slightly in March, weighed down by a marginal slowdown in sales amid softer demand conditions and easing inflationary pressures, a monthly survey said on Friday.
Photograph: Framcis Mascarenhas/Reuters
The seasonally adjusted HSBC India Services PMI Business Activity Index fell from February’s reading of 59.0 to 58.5 in March, but remained above its long-run average of 54.2.
In the Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.
“India recorded a 58.5 services PMI in March 2025, softening slightly from the month prior. Domestic and international demand remained fairly buoyant, despite being sequentially a tick lower than the month before,” Pranjul Bhandari, Chief India Economist at HSBC, said.
According to survey participants, output was supported by buoyant underlying demand and ongoing increases in new business.
However, sales rose at a softer pace than in February, they added.
The slowdown in the growth of total new business reflected a weaker increase in international sales. New orders from abroad rose at the softest pace in 15 months.
On the price front, output charge inflation slowed to a three-and-a-half-year low in March.
Only 1 per cent of survey participants reported higher average fees than in February, with the remaining companies signalling no change.
Panellists identified heightened competition as the main challenge for growth prospects going ahead.
The level of positive sentiment slipped to a seven-month low and was below its long-run average.
Consumer Services firms were the most upbeat in March, followed by Finance & Insurance, Real Estate & Business Services and Transport, Information & Communication.
As per the survey, hiring activity across the service economy was pared back in March.
Meanwhile, the Indian private sector activity continued to rise strongly in March, as companies welcomed a further upturn in new orders.
The HSBC India Composite PMI Output Index increased to a seven-month high of 59.5, from 58.8 in February, to signal another month of above-trend growth.
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.
Business confidence and job creation softened among goods producers and services companies.
At the composite level, employment rose at the slowest pace in just under a year, whereas optimism faded to the weakest since October 2024.
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.
