At the same time, firms expressed strong optimism about future activity,

HSBC India Services PMI at 57.5, Growth Hits 14-Month Low as Costs Rise

India’s services sector growth slowed to a 14-month low in March, with the HSBC India Services PMI easing to 57.5 from 58.1 in February, even as the index remained firmly in expansion territory.

According to Pranjul Bhandari, the sector continued to expand despite softer momentum for the second consecutive month, supported by resilient demand conditions.

The report noted that input cost inflation accelerated to its fastest pace since 2022, driven by higher fuel, transport and food prices, indicating rising cost pressures for businesses.

At the same time, firms expressed strong optimism about future activity, with overall business confidence reaching its highest level in nearly 12 years on expectations of improved demand.

While domestic demand showed signs of easing, international demand remained a key support. Export orders grew at a robust pace, with firms reporting increased foreign sales from regions including Africa, Asia, Europe and the Americas.

However, new business inflows expanded at the slowest pace since January 2025, with softer demand observed across sectors such as finance, real estate and transport.

Survey participants also pointed to external factors, including the impact of ongoing tensions in West Asia, as weighing on demand, particularly in tourism-related segments.

Overall output growth moderated during the month, reflecting the combined effect of weaker domestic demand and a slowdown in new business inflows.