India Services PMI Hits Six-Month High

India's services sector experienced its fastest expansion in six months during May, with the HSBC India Services Business Activity Index rising to 59.8 from 58.8 in April. This growth was primarily driven by a significant increase in new business volumes, fueled by strong domestic demand and client wins in sectors like e-commerce, entertainment, and information technology. Export demand also improved, with new business from countries including Australia, Canada, France, Germany, China — Hong Kong, Malaysia, the United Arab Emirates, and the United Kingdom, although growth remained below the 2025 average. Input cost inflation eased for the second consecutive month, leading to a moderation in selling price increases. Companies continued to add staff, marking solid employment growth, though job creation was not widespread. Despite the strong performance, business sentiment softened due to global uncertainties. Pranjul Bhandari, Chief India Economist at HSBC, noted the expansion in business activity and the rebound in external demand, along with easing input cost inflation.