India’s services sector growth slowed in February as new business rose at its slowest pace in over a year and firms faced the steepest cost pressures in two-and-a-half years. The HSBC India Services Purchasing Managers’ Index, compiled by S&P Global, fell to 58.1 in February from January’s 58.4, and was lower than a preliminary estimate of 58.4. The 50-mark separates growth from contraction. New business - a key gauge of demand - expanded at the slowest pace since January 2025, held back by intensifying competition among service providers despite increased marketing campaigns.
However, international sales rose at the fastest pace since August as firms reported higher demand from abroad. Service providers faced a sharper increase in operating expenses, driven primarily by higher food costs along with energy and labour. Employment rose for a second month, with hiring accelerating from January as firms prepared to meet current and future operational needs.
The business confidence jumped to a one-year high as companies expected increased demand and anticipated benefits from marketing initiatives. The overall composite PMI, which combines manufacturing and services activity, moved up to 58.9 in February from 58.4, marking the fastest pace of private sector growth in three months.