India’s services sector growth rebounds in November

India’s services sector rebounded in November, as new business intakes increased amid subdued price pressures and improving demand, a private survey showed on Wednesday.

The HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 59.8 in November from 58.9 in October, marking a pickup in growth after the index expanded at its slowest pace since May in the previous month.

Despite monthly swings, the index has remained above the 50-point threshold separating expansion from contraction for over four years, signalling the sector’s sustained resilience despite headwinds.

The outlook

While growth gathered momentum, input costs and selling prices rose at a more moderate pace, and firms remained optimistic about future prospects, the survey noted.

Data showed that the absence of price pressures supported positive demand trends. There was a negligible rise in selling prices, as input cost inflation retreated to its lowest level in nearly five and a half years, it added.

“…year-ahead optimism faded during November amid some concerns around competition and potential disruptions from state assembly elections. Firms still foresee output growth, however, with positive sentiment linked to favourable demand, a greater social media presence, marketing initiatives, and plans to keep price increases to a minimum,” the survey noted.

The HSBC India Services PMI draws on responses from approximately 400 companies across various sectors, including consumer services (excluding retail), transport, information and communication, finance, insurance, real estate, and business services.

External headwinds

Beyond domestic factors, external risks continue to cloud the outlook for the country’s services industry. In particular, US President Donald Trump’s policies—stricter H-1B visa rules, higher application fees, and discussions on tariffs for digital services—have added fresh headwinds. At the same time, tighter US spending and rising protectionism have slowed deal closures and squeezed margins for Indian tech firms.

"India’s services PMI business activity index rose from 58.9 in October to 59.8 in November, driven by robust new business intakes that fuelled output growth. However, international sales expanded at an eight-month low due to fierce overseas services competition,” said Pranjul Bhandari, chief India economist at HSBC.

“Input price inflation reached its lowest rate in nearly five-and-a-half years, resulting in negligible increases in selling charges. Employment growth remained modest, with most companies reporting no change in payroll numbers. India's composite PMI remained strong, though it softened slightly to 59.7 in November, reflecting a slowdown in growth of factory production,” he added.

Although more jobs were added to India's service economy in November, the rate of expansion was moderate and broadly similar to seen in the previous two months, the survey said.

Data showed that one factor that restricted employment growth was the absence of pressure on firms' operating capacities. Following a marginal decline in October, outstanding business volumes were broadly stable halfway through the third fiscal quarter, it said.

“The latest services-PMI points to a broadly positive picture: domestic demand remains firm, and services providers continue to expand, signalling that the growth engine in the services sector is holding up well. Nonetheless, intense competition appears to be constraining pricing power, preventing firms from significantly increasing charges despite the underlying momentum," said Rishi Shah, partner and economic advisory services leader, consulting firm Grant Thornton Bharat.

"In that context, the forward trajectory will crucially depend on how global growth fares, with external demand and global macro-headwinds likely to shape how robust this momentum remains in the months ahead,” he added.

The rise in services activity comes even as India’s manufacturing sector growth softened to a five-month low in November due to US tariffs. The HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell to 56.6 in November 2025 from 59.2 in October, the slowest expansion since February 2025.

Meanwhile, India's gross domestic product (GDP) growth rose to a six-quarter high of 8.2% in the September quarter, up from 7.8% in the June quarter, contrary to expectations of a slowdown. However, with manufacturing showing signs of slowing down, the GDP growth is expected to slow down in the coming quarters.