India’s services sector remained in expansionary territory in the month of July but the growth lost substantial momentum, as new business inflows increased only moderately amid softer demand, competitive pressures and fewer enquiries. Limited bookings and weak sales performances underpinned backlog clearances at service providers during July, following marginal increases in May and June. Although moderate, the pace of decline in outstanding business was the quickest in close to five years.
According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index fell to 53.3 in July from 57.4 in June. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also eased to 54.3 in July as against 57.1 in June. The report, however, noted that new export orders rose at a solid rate at the start of the second fiscal quarter, and one that was stronger than seen for total sales, amid improving demand from clients in the UAE, UK and US in particular.
On the price front, input cost inflation eased to its lowest rate since January, but selling charges were raised to a greater extent. Consumer Services posted the strongest rate of cost inflation at the sub-sector level, albeit one that was the softest since the start of 2026. Nevertheless, Consumer Services was at the bottom of the charge inflation rankings, whereas Real Estate & Business Services occupied the top spot. Across the service economy as a whole, output prices rose at the quickest pace since April.
