Services PMI recovers to 58.8 in April despite slowing export growth

India’s services sector activity rose to a five-month high in April, rebounding from a 14-month low in March as output and new order intakes recovered, said a private survey on Wednesday.

 

The HSBC India Services Purchasing Managers’ index (PMI), compiled by S&P Global, rose to 58.8, up from 57.5 in March. The April reading was the highest since November 2025, when it was 59.8.

 

Companies said stronger ecommerce demand and a shift towards domestic suppliers amid the West Asia conflict boosted transport, even as exports slowed due to the war and weak inbound tourism.

 

“According to survey participants, competitive pricing, ecommerce and particularly strong customer demand for relocation and logistic services boosted sales growth,” said the survey.

 

 

The March reading remained above 50, the threshold separating expansion from contraction. The headline figure has been in the expansion zone for the 57th month running.

 

“India’s services PMI climbed to a five-month high of 58.8 in April. Activity and new orders strengthened, even as new export orders eased, suggesting that demand is rotating from overseas markets to domestic consumers amid the Middle East conflict,” said Pranjul Bhandari, chief India economist at HSBC.

 

Output and new order intakes recovered in April, with inflows of new work increasing to the greatest extent in five months. The sub-category of consumer services led the expansion in new orders and output, followed by transport, information and communications.

 

However, growth in international orders continued to take a hit from the West Asia conflict. The seasonally adjusted New Export Business Index fell by more than five points and reached its second-lowest print in over a year. “Companies indicated that the war in the Middle East and subdued inbound tourism dampened the expansion,” the survey said.

 

Services firms once again reported a substantial increase in their operating expenses. While slowing in April, the rate of inflation was one of the highest seen since November 2024.

 

“Monitored firms cited greater food (cooking oil, egg, meat and vegetables), gas and labour costs, as well as shortages of gas,” the survey said.

 

Service providers transferred only part of the additional cost burden to consumers as an increase in selling prices remained moderate in April. The overall rate of charge inflation receded to a three-month low.

 

“Rates of input and output price inflation were highest in the consumer services and transport, information and communication categories.”

 

“Input cost inflation moderated but remained elevated, while output price inflation stayed subdued, indicating that some firms are absorbing higher costs rather than passing them on,” said Bhandari.

 

Companies stepped up hiring at the start of the financial year as rising volumes of new business led to greater recruitment of short-term staff workers and junior-level trainees. Employment growth accelerated across all four major segments of the services sector tracked by the survey.

 

The survey tracks four major segments: Consumer services, finance and insurance, real estate and business services, and transport, information and communication.

 

The recovery in the services sector mirrored that in the manufacturing sector, which also rose to 54.7 in April after tumbling to a four-year low of 53.9 in March.

 

The HSBC India Composite PMI Output Index, which is a weighted average of the Manufacturing Output Index and the Services Business Activity Index, rose to 58.2 in April, rising from 57 in March. However, the April reading was among the lowest in around two-and-a-half years, the survey said