India’s Services Sector Surges in March: Record Growth, Hiring, and Optimism

India’s services industry experienced accelerated growth in March driven by strong demand, as indicated by the final HSBC India Services Purchasing Managers’ Index.

The index rose to 61.2, surpassing the preliminary estimate of a slight decline to 60.3, marking the 32nd consecutive month of growth.

Employment increased at the fastest rate in seven months, reflecting buoyant domestic demand and favorable economic conditions.

Export business expanded at a record pace, with the quickest growth since the inclusion of the sub-index in the survey in September 2014.

Firms responded to the surge in demand by ramping up hiring, particularly significant for a country with a large influx of new entrants to the workforce annually.

Despite optimism for the future, the outlook showed a slight dip in the future activity sub-index, attributed to concerns about competitive pressures.

Rising input costs led firms to adjust prices upward, resulting in the strongest rate of price increase since July 2017.

The high prices could potentially influence the Reserve Bank of India’s decision to maintain the repo rate at 6.50% for an extended period.

The combined expansion in both services and manufacturing industries pushed the HSBC final India Composite PMI Index to an eight-month high of 61.8, reflecting robust overall economic activity.

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