India’s services PMI eases to 58.5 in March; output charge inflation drops to 3.5-year low

India’s services sector continued its strong expansion in March, although the pace of growth slightly moderated. The HSBC India Services PMI stood at 58.5 in March 2025, down from 59.0 in February, indicating a robust but slightly softer increase in business activity. The figure remained well above the neutral mark of 50, signaling continued economic expansion, supported by sustained domestic demand and new business wins.

Finance & Insurance and Consumer Services were the top-performing sub-sectors. However, a notable slowdown was seen in international orders, which registered the weakest growth in 15 months. The report also highlights that input cost inflation eased to a five-month low, leading to the slowest increase in output prices since September 2021. Competitive pressures and subdued price hikes impacted pricing decisions.

Employment across the service sector increased but at the weakest pace in nearly a year. Business sentiment softened, hitting a seven-month low, reflecting concerns over heightened competition. Despite these headwinds, the overall services landscape remained favorable, with subdued inflationary trends offering some respite to service providers.

Meanwhile, the HSBC India Composite PMI, which includes both manufacturing and services, rose to a seven-month high of 59.5 in March, pointing to broad-based private sector growth even as global uncertainty looms.

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