Services activity hits 3-month high in September on demand surge
- IBEF
- October 7, 2026
India’s services sector activity rose to a three-month high in September 2026, supported by stronger domestic demand and improved sales performance, according to the HSBC India Services Business Activity Index. The index increased to 55.2 in September from 54.1 in August, remaining above the 50-mark that indicates expansion, although it was lower than 60.9 recorded in September 2025. Ms. Pranjul Bhandari, Chief India Economist at HSBC, noted that the services sector continued to improve, supported by strengthening domestic demand, while export business also remained in expansion territory. New orders in the services sector increased at their fastest pace in three months, with finance and insurance and consumer services recording the strongest expansions in both activity and sales. Business confidence also improved as customer enquiries increased, with just under 16% of respondents expecting output to rise over the next 12 months. The improvement in services activity highlights the resilience of India’s domestic demand and the continued expansion of the services economy.
The broader private-sector activity also strengthened during September, with manufacturing activity rising to a seven-month high. The manufacturing PMI increased to 55.1 in September from 52.8 in August, while India’s composite PMI, combining manufacturing and services activity, rose to 55.9 from 54.3, supported by a strong increase in new orders. Ms. Pranjul Bhandari, said the outlook remained positive, with service providers reporting improved expectations for future activity for the second consecutive month. Export demand for Indian services continued to expand, with respondents reporting gains from Germany, the UAE, the UK and the US, although the growth in new export business was the slowest in nearly three years. Despite the improvement in monthly activity, the average services PMI for July-September was the lowest since the quarter ended March 2022. The continued expansion in services and manufacturing activity, alongside resilient domestic demand and improving business confidence, supports the outlook for India’s broader economic activity.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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