Services sector growth in India slumped to a three month low, the HSBC Services Purchasing Managers' Index, compiled by Markit, showed.

"Where growth was noted, this was linked by firms to higher volumes of incoming new business. By category, the quickest increase was seen in Post & Telecommunication, while Hotels & Restaurants was the only sub-sector to see a contraction," the HSBC Services Purchasing Managers' Index report said.

The slower rise in service sector activity was matched by a softer increase in manufacturing production. As a result, the headline HSBC India Composite PMI Output Index fell from 53.2 in March to a six-month low of 52.5 in April.

Nonetheless, the latest reading still indicated that the private sector remained in expansion territory.

Commenting on the India Services PMI survey, Pollyanna De Lima, Economist at Markit said:"The slowdown in the Indian service sector continued in April, with weaker activity growth reflecting softer demand conditions. Accompanying the subdued outlook in the opening month of the fiscal year, was a return to job shedding as companies maintained a cost-cautious approach. On the positive side, panellists' confidence regarding the one-year outlook for activity improved, indicating that firms are optimistic the current deceleration in growth is a temporary soft patch.

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