India’s services sector expanded at its fastest pace in four months in October, with the HSBC India Services PMI rising to 55.8 from 55.2 in September. Strong domestic demand and new business supported growth, while export orders expanded at their slowest pace in nearly four years.
New Delhi, November 4 — India’s services sector activity expanded at its fastest pace in four months in October 2026, supported by strong demand and growth in new business, according to a monthly survey.
The seasonally adjusted HSBC India Services PMI Business Activity Index increased to 55.8 in October from 55.2 in September, indicating an improvement in business conditions.
In PMI terminology, a reading above 50 indicates expansion, while a reading below 50 signals contraction.
Pranjul Bhandari, Chief India Economist at HSBC, said overall demand remained fairly strong during the month, although new export orders recorded their slowest pace of expansion since February 2023.
Survey participants identified growth in new business as the main driver of higher output.
Favourable demand conditions, new client wins and successful advertising campaigns helped companies secure more orders during October.
However, the international business environment was comparatively weaker, with the latest expansion in overseas sales being the slowest in almost four years.
Companies also received some relief on the inflation front.
Input and output prices continued to increase, but the pace of growth slowed compared with September, signalling an easing of cost pressures.
Employment growth, meanwhile, moderated to its weakest pace since June. Companies increased staffing levels at the slowest rate in four months, suggesting that some businesses already have sufficient capacity to meet their current requirements.
Businesses remained cautiously optimistic about the outlook, although confidence weakened compared with the previous month.
India’s broader economic activity also strengthened during October.
The composite PMI increased to 56.2 from 55.9 in September, marking the fastest expansion in aggregate output in four months.
New business at the composite level also increased at its strongest pace since June.
At the same time, cost pressures eased across both manufacturing and services companies, pushing the aggregate rate of inflation to an 11-month low.
The HSBC India Services PMI is compiled by S&P Global using responses to questionnaires sent to a panel of around 400 service-sector companies.
The latest data indicates that India’s services economy continues to expand, although weaker export demand, slower hiring and cautious business confidence remain areas to watch in the coming months.
