India's services PMI hits 58.7 in April, export orders drive modest growth

India's Services Purchasing Managers' Index (PMI) for April 2025, compiled by S&P Global, rose to 58.7, indicating a slight growth in the country's services sector compared to the 58.5 recorded in March. The India Composite PMI, which combines the manufacturing and services PMI, also improved to 59.7, up from 59.5 in March. A PMI reading above 50 signals sector expansion, while a below 50 indicates contraction. The overall output growth was driven by a substantial rise in new business intakes, matching an eight-month high, with numerous companies reporting favourable market conditions and effective marketing campaigns. The finance and insurance sub-sector showed the strongest output and growth rates for new orders. New export orders gained momentum, accelerating fastest since July 2024. Margins improved as cost pressures eased, and prices charged rose faster. Though firms remained optimistic about future growth, their confidence waned slightly, according to Chief India Economist at HSBC Ms. Pranjul Bhandari.
Indian service providers continued to benefit from strengthened international demand, with particular growth noted from Asia, Europe, West Asia, and the US markets. The expansion of new export orders reached its fastest pace since July 2024. The Services PMI is an important indicator that provides insight into the performance and economic health of the services sector, tracking key variables such as sales, employment levels, inventory management, and prices. India's composite PMI, which combines data from both the Manufacturing PMI and the Services PMI, improved to 59.7 in April, up from 59.5 in March. The manufacturing sector registered a 10-month high in April 2025, with the HSBC India Manufacturing PMI rising slightly to 58.2 from 58.1 in March. In March, the Index of Industrial Production (IIP) growth recovered slightly to 3% from a six-month low of 2.72% in February. The Reserve Bank of India's Monetary Policy Committee (MPC) slashed the repo rate by 25 basis points to 6% in April, suggesting more rate cuts may follow.

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