India's services sector growth hits 2-month high in January: PMI report

India's services sector growth rose to a two-month high of 58.5 in January, on faster expansion in new business intake and output, prompting service providers to hire additional staff, a monthly survey said on Wednesday, February 4.The seasonally adjusted HSBC India Services PMI Business Activity Index rose to a two-month high of 58.5 in January, from December's recent low of 58.0, mainly driven by demand buoyancy, new business gains and tech investment.In the Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction. HSBC noted that January data showed the domestic market remained the main source of new business gains, although international orders also rose at a solid pace. The pace of overall expansion was the strongest in three months.It stated "India's services PMI rose to 58.5 in January, up from 58.0 in December, signalling sustained momentum in the sector. Robust output growth was driven by a steady influx of new orders".It also mentioned that service providers across the country reported a recovery in growth during January, supported by quicker expansions in new business intakes and output. Firms were also more optimistic about the outlook and increased hiring during the month."India's services PMI rose to 58.5 in January, up from 58.0 in December, signalling sustained momentum in the sector. Robust output growth was driven by a steady influx of new orders, including increased international demand from South and Southeast Asia," said Pranjul Bhandari, Chief India Economist at HSBC.Service providers in India noted faster growth in new business intake and output. They were also more upbeat towards the outlook and hired additional staff, the survey noted.On the pricing front, input costs and selling charges rose at a quicker, though still moderate, pace.Meanwhile, the HSBC India Composite PMI Output Index climbed from December's 11-month low of 57.8 to 58.4 in January. The reading signalled a sharp rate of expansion, supported by stronger growth in both manufacturing and services. Improved demand conditions across the two sectors also lifted overall sales, taking the pace of expansion to a two-month high.HSBC also shared that, similar to output trends, new orders increased at the fastest pace in two months, after growth had slipped to an 11-month low at the end of 2025. Companies cited stronger client interest and an improved online presence as key factors driving higher sales.According to the survey, new orders rose at the quickest pace in two months. The main source of new business gains was the domestic market, but international orders nevertheless rose solidly.Survey participants remarked on new business gains from clients in Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand and Vietnam.Service providers in India were more upbeat towards the outlook.With inputs from PTI/ANI.