India’s services sector remained in expansion territory, but growth slowed to a 17-month low as softer domestic demand weighed on business activity despite strong export orde
Key Highlights:
- HSBC India Services PMI declined to 57.4 in June from 59.8 in May.
- June marked the lowest services PMI reading in 17 months.
- Domestic demand and client interest softened across several sectors.
- New export orders grew at the fastest pace in three months.
- Hiring activity remained largely unchanged as firms maintained existing workforce levels.
- Services sector continued to expand, with PMI staying above the 50-point growth threshold.
New Delhi, July 3: India’s services sector continued to expand in June, although the pace of growth slowed to its weakest level in 17 months as softer domestic demand and weaker client interest weighed on business activity.
According to the latest HSBC India Services PMI survey, the Business Activity Index eased to 57.4 in June from 59.8 in May. While the reading remained comfortably above the 50-point mark that separates expansion from contraction, it reflected a noticeable moderation in growth momentum.
The slowdown was primarily driven by the weakest increase in new domestic orders in more than two-and-a-half years. Several businesses cited subdued market conditions and reduced customer demand, although sectors linked to e-commerce, tourism, and competitive pricing continued to support activity.
Despite softer domestic demand, international business remained resilient. New export orders recorded their strongest growth in three months, helping offset weakness in the local market and providing support to overall services activity.
Employment growth also lost momentum during the month, with most service providers keeping workforce levels largely unchanged after robust hiring in April and May. Companies indicated that existing staffing levels were sufficient to meet current business requirements.
Economists noted that while India’s services sector continues to show healthy expansion, the latest data suggests businesses are navigating a more challenging domestic demand environment. Going forward, both consumer spending and global demand will remain key factors influencing the sector’s growth trajectory.
