India's services economy lost momentum for a second consecutive month in March, growing at its slowest pace of expansion in more than a year as demand cooled and inflationary pressures built.
The HSBC India Services Purchasing Managers’ Index, compiled by S&P Global, fell to 57.5 last month from 58.1 in February.
Despite the domestic deceleration, India’s service providers saw a surge in international appetite, with new export orders rising at the fastest clip since mid-2024.
However, a primary concern for policymakers will be the sharp spike in operating expenses, driven by a broad rally in the prices of fuel, electricity, and essential food items.
In response, service providers hiked their own selling prices at the quickest rate in seven months to protect margins.
The labour market, however, remains resilient, with job creation accelerating to its strongest pace since mid-2025.
The broader economy also showed signs of a soft patch, with the HSBC India Composite PMI Output Index dropping to 57.0 from 58.9.
