Services PMI Slips To 58.5 In March, But India’s Private Sector Activity Remains Strong

India’s services sector continued to grow strongly in March 2025, although at a slightly slower pace than in February. According to the HSBC India Services Purchasing Managers’ Index (PMI), the index stood at 58.5 in March, down from 59.0 in February. Despite the slight decline, the index remained well above its long-run average of 54.2, showing that the sector is still expanding at a healthy rate.

It said, “Registering 58.5 in March, the seasonally adjusted HSBC India Services PMI Business Activity Index – based on a single question asking how the level of business activity compares with the situation the month before – was comfortably above the neutral mark of 50.0 and indicated a sharp rate of expansion. Although below February’s reading of 59.0, the headline index remained above its long-run average (54.2).”

The index data also highlighted that economic conditions in India’s services sector remained favourable at the end of the 2024-25 financial year. Strong demand and new business orders continued to drive growth in activity. However, sales grew at a softer pace compared to February. Even so, the increase was still considered sharp by survey participants.

What Else For Services PMI?

At the same time, the HSBC India Composite PMI Output Index, which combines services and manufacturing data, rose to 59.5 in March from 58.8 in February. This was the highest level in the last seven months and indicated another month of above-trend growth in India’s private sector.

“Indian private sector activity continued to rise strongly in March, as companies welcomed a further upturn in new orders. Moreover, the HSBC India Composite PMI Output Index increased to a seven-month high of 59.5, from 58.8 in February.”

Among the services sub-sectors, Finance & Insurance showed the strongest growth, followed by Consumer Services. There was a broad-based increase in business activity and sales across all major service industries.

However, international sales grew at the slowest pace of 15 months, which slightly pulled down the overall rise in new business. On the cost front, input price pressures eased to a five-month low. Due to increased competition and softer cost pressures, the rate at which service providers raised their prices was the weakest since September 2021. Only 1% of the firms surveyed reported an increase in their fees compared to February, while the rest saw no change.

However, the report also showed that hiring activity in the services sector was slower in March. Although employment still increased at an above-average pace, it was the weakest in nearly a year. Many companies said they already had enough staff to meet current demand. 

ALSO READ: US Tariffs: Why Indian Agriculture Sector May Have Less To Worry About? Here’s What A Economist Said