India’s Services Sector Growth Accelerates to Six-Month High in May
- IBEF
- June 4, 2026
India’s services sector recorded its strongest growth in six months in May 2026, supported by rising demand, increased business activity and a recovery in export orders. According to the latest HSBC India Services Purchasing Managers’ Index (PMI) survey compiled by S&P Global, the seasonally adjusted Services Business Activity Index rose to 59.8 in May from 58.8 in April, marking the fastest pace of expansion since November 2025. A reading above 50 indicates growth in activity. The survey attributed the improvement to healthy economic conditions and successful client acquisition efforts, which boosted output across the sector. New business inflows expanded at the fastest pace in six months, outpacing growth in the manufacturing sector even as both segments reported stronger activity. Reflecting broad-based economic momentum, the HSBC India Composite Output Index, which combines manufacturing and services activity, increased from 58.2 in April to 59.3 in May, indicating accelerated expansion across the private sector economy.
The survey also highlighted an improvement in international demand, with export orders recovering from the decline recorded in April and increasing across key markets including Australia, Canada, France, Germany, Hong Kong, Malaysia, the United Arab Emirates and the United Kingdom. To meet growing business requirements, service providers continued to expand their workforce, with employment growth remaining the second-fastest recorded in nearly a year. While input costs increased due to higher expenses related to food, fuel, gas, labour and raw materials, the pace of cost inflation eased to a four-month low, reducing pressure on businesses to raise prices. Consequently, selling prices increased at the slowest pace since January and remained broadly aligned with historical trends. Among the monitored segments, consumer services emerged as the strongest-performing category, leading growth in both output and new business. The sustained expansion in services activity highlights the resilience of domestic demand and reinforces confidence in India’s economic growth outlook despite global uncertainties.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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