India’s services sector growth strengthened in April as the HSBC India Services PMI rose to 58.8 from 57.5 in March, marking the fastest expansion since November. New orders also grew at the quickest pace in five months, supported by strong domestic demand and rising e-commerce activity.
Companies said transport and logistics demand increased after firms shifted from international suppliers to domestic suppliers due to disruptions linked to the Middle East war. Consumer Services led growth in output and new orders, followed by Transport and Information & Communication.
Export demand weakened sharply during the month. The New Export Business Index fell by more than five points and hit its second-lowest level in over a year, higher only than November 2025 levels. Firms cited the Middle East conflict and weak inbound tourism as key reasons.
Input cost inflation eased slightly in April but still remained among the highest levels since November 2024. Businesses reported rising costs for cooking oil, eggs, meat, vegetables, gas, and labour, while some companies also faced gas shortages.
Despite higher costs, firms passed only part of the burden to customers. Selling price inflation slowed to a three-month low, showing companies remained cautious on price hikes amid competition.
Hiring activity improved across all four major service categories as companies recruited short-term staff and junior-level trainees. Stronger hiring also helped reduce pending work for the first time in four months, although backlog reduction remained marginal.
India’s overall private sector growth also improved. The HSBC India Composite PMI Output Index rose to 58.2 in April from 57.0 in March, while overall new orders expanded faster than the long-run average. However, overall private sector inflation remained the second-highest since August 2023.
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