January PMI figures: Indian services sector growth hits two-month high – The Times of India

India’s services sector got off to a strong start to 2025 as activity climbed to a two-month high in January, thanks to improving demand and companies expanding capacity. The seasonally adjusted HSBC India Services PMI Business Activity Index climbed to 58.5 in January, up from 58.0 in December, due to faster growth in output and new business. In the PMI, values ​​above 50 indicate expansion, while values ​​below 50 indicate contraction. Growth was supported by buoyant demand, supported by increased new orders and continued investment in technology. Service providers reported a faster increase in business volumes and responded by recruiting staff, while sentiment around future business also improved. “India’s services PMI rose to 58.5 in January from 58.0 in December, indicating continued momentum in the sector. The robust manufacturing growth was driven by steady inflows of new orders, including increased international demand from South and Southeast Asia,” said Pranjul Bhandari, chief India economist at HSBC. The survey found that new orders rose at the fastest pace in two months. Domestic demand remained the main contributor to growth, although international activities also developed at a strong pace. Respondents highlighted new work from clients in Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand and Vietnam. Service providers were increasingly positive about the prospects. “Business confidence rose to a three-month high, supported by efficiency gains, effective marketing and new customer acquisition. While input and output prices are rising, they remain fairly dovish by historical standards,” Bhandari added. Price pressures increased over the month, but remained subdued overall. The sharpest cost increases were reported in the Consumer Services segment, while the strongest increase in sales prices was observed in the Finance & Insurance sector, the study found. Broader private sector activity also increased in January. Faster growth in new orders and production supported employment growth and strengthened confidence. The HSBC India Composite PMI Output Index rose to 58.4, up from an 11-month low of 57.8 in December. Composite PMI indices are calculated as weighted averages of industrial and service sector indicators, with weights based on each sector’s relative contribution to GDP. “The composite PMI also strengthened in January, reflecting solid demand growth in both manufacturing and services sectors,” Bhandari said. On the employment front, the survey shows that private sector employment increased in early 2026 after remaining flat in December, with both manufacturing and service providers recording slight increases in headcount.