India Services PMI Data: India’s Services Sector Growth Falls To 11-Month Low In December

India's services sector grew more slowly in December, with expansion easing to the weakest in 11 months as hiring stalled and demand cooled. The HSBC India Services Purchasing Managers' Index slipped to 58.0 from November's 59.8, while the broader India Composite PMI, which includes manufacturing, also moved lower.

The services PMI reading of 58.0 was below the flash estimate of 59.1 but still well above the 50.0 mark, which separates growth from contraction. The survey, compiled by S&P Global, showed that although activity remained strong, momentum eased compared with earlier months of 2025.

India services PMI and demand trends

New business inflows, a key gauge of demand in the India services PMI survey, grew at their slowest pace since January 2025. Companies continued to report firm client interest and generally supportive demand, yet many also pointed to tougher competition from rivals providing cheaper services, which limited the pace of overall growth.

"While India's service sector continued to perform well in December, the retreat in several survey indicators as 2025 ended may suggest a moderation in growth heading into the new year," Reuters quoted Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

India services PMI, employment and confidence

The labour market picture softened as a 42‑month run of job creation ended in December, with companies marginally trimming staffing. Nearly all respondents, 96% of firms surveyed, left headcounts unchanged, suggesting limited appetite for expansion despite ongoing business growth in the India services PMI report.

Sentiment about future activity weakened again. Business confidence fell for a third straight month and dropped to its lowest level in more than three years, indicating services firms were more cautious about prospects for 2025 despite current output still rising.

India services PMI, prices and composite output

Cost pressures picked up slightly, as input prices in December rose faster than in November but stayed below their long‑run average. Output price inflation remained subdued, with fewer than 3% of surveyed firms reporting fee increases, showing limited pricing power across the India services PMI sample.

"What bodes well for the outlook is the benign inflation environment. If services firms continue to see only mild increases in their expenses, they should be better positioned to compete and limit price hikes, thereby boosting sales and creating more jobs," De Lima told Reuters. The HSBC India Composite PMI, which also covers manufacturing where growth slowed to a two‑year low, fell to 57.8 in December from 59.7 in November, hitting an 11‑month trough but still signalling solid overall economic expansion.