India Services PMI Moderates to 60.9 in September

New Delhi, October 6, 2025: The services sector growth in India slowed down in September when new business and activity grew at a lesser pace than the 15-year high of August, according to a PMI report released on Monday.

The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 62.9 in August to 60.9 in September, which reflected moderation due to competition pressure and cost-cutting efforts. While the index moderated, it remained significantly above the neutral 50.0 benchmark, indicating continued business activity expansion.

Growth Moderation But Momentum Intact

Even if expansion slowed down from the spurt experienced in August, commentators noted the slowdown did not indicate any abrupt loss of pace.

Business sentiment across India’s services sector softened in September from a recent high in August. Most of the indices eased, but there was no indication from the survey that a significant loss of pace of growth, feared by some, exists, commented Pranjul Bhandari, Chief India Economist at HSBC.

The report stated that the slowdown was partly due to sluggish foreign demand, with export orders growing at their weakest pace since March. Foreign demand constraints were attributed to weaker foreign prices for services, according to the survey respondents.

Prices and Employment Trends

The sector inflation cooled off, with the inflation of input costs slowing down for the first time since March, in sync with long-term trends. Prices for services charged also increased at a slower pace for the month, a reflection of companies’ attention to pricing competition.

Job creation on the employment side eased, with fewer than 5% of respondents reporting increased hiring, while business firms remained upbeat about the future, with sentiment rising to a six-month high.

Optimism Strengthens

The survey recorded that sentiment was better due to anticipated advertising increase, gains in efficiency, pricing strategies based on competition, and prospective reductions in taxes. “The Future Activity Index advanced to its highest reading since March, showing growing confidence on the part of services firms about business prospects,” said Bhandari.

Composite PMI Indicates Softer Private Sector Expansion

In the broader economy, the non-government sector of India kept growing, but marginally less quickly. HSBC India Composite PMI Output Index retreated from 63.2 in August to 61.0 in September, the weakest rate of growth since June, but safely above the long-term average. The survey noted weaker gains in new orders, business activity, overseas sales, and jobs, together with weaker output charges and cost increases.

The HSBC India Services PMI, a report published by S&P Global, is a survey of approximately 400 service providers across India. A reading above 50 indicates expansion, while a reading below 50 indicates contraction. Overall, the September data signaled steady but moderating growth in India’s services and private sectors, suggesting continued resilience despite global headwinds and competitive pressures.

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