India services PMI rises to 58.8 in April as domestic demand offsets global headwinds

India’s services sector began the new financial year on a stronger note, supported by firm domestic demand despite global uncertainties.

The HSBC India Services PMI, compiled by S&P Global, rose to 58.8 in April from 57.5 in March. This was higher than the preliminary estimate of 57.9 and marked a recovery from a 14-month low.

The latest reading signals a steady expansion in activity, as the index remains well above the 50 mark that separates growth from contraction.

April’s print also reflects a broader trend of resilience. Services activity has stayed above the 56 mark over the past year, highlighting consistent demand conditions. The index had peaked at 62.9 in August 2025 before easing in the following months, with an average of 59.4 in FY26.

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New business growth picked up to a five-month high. Consumer services led the expansion, followed by transport, and information and communication segments, pointing to sustained strength in household demand.

However, external demand remained under pressure. International sales growth slowed to one of the weakest levels in over a year, with firms citing geopolitical tensions in West Asia and softer inbound tourism.

Cost pressures eased slightly from March’s near four-year high but remained elevated. Businesses continued to face higher expenses for food, fuel and labour.

Companies absorbed much of these costs, as selling price increases were moderate and the slowest in three months.

Hiring activity improved during the month. Firms increased recruitment of short-term staff and junior workers, resulting in the fastest pace of job creation in 10 months.

The overall composite PMI, which combines manufacturing and services, rose to 58.2 in April from 57 in March, signalling strong private sector expansion.

Manufacturing also showed improvement, with its PMI rising to 54.7 from 53.9, indicating that domestic demand remained supportive across sectors at the start of the fiscal year.