Industry Odisha Bureau, July 4: India’s services PMI sector recorded its slowest pace in the last 17 months in June, according to a private sector survey. This came after weaker domestic demand and slower growth in new business weighed on the overall activity.
The HSBC India Services PMI Business Activity Index declined to 57.4 in June from 59.8 in May. Although the index stayed in expansion territory, it recorded its slowest growth in June 2025. The survey attributed the slowdown to the weakest rise in new business orders in more than two and a half years. Businesses reported that intense competition and lower customer interest in the domestic market affected demand during the month.
“The loss of momentum points to more challenging market conditions and weaker demand, particularly at home,” said Pranjul Bhandari, Chief India Economist at HSBC.
India Services PMI June 2026: Exports remain resilient
Despite the softer domestic market, export demand provided some support to the services sector. New export orders grew at their fastest pace in three months. This was driven by stronger demand from Australia, Germany, Singapore, the UAE and the United States.
Some companies also recorded improved business due to competitive pricing, stronger e-commerce demand, higher customer bookings and increased local tourism. Hiring activity, however, showed sharply in June. Companies said their existing workforce was sufficient to handle current workloads, resulting in a pause in recruitment after strong job creation in April and May.
The survey also indicated that cost pressures eased during the month. Input costs rose at their slowest pace in five months, partly due to easing geopolitical disruptions in West Asia. However, firms continues to report higher expenses on electricity, food, fuel, and transportation.
India Services PMI June 2026: Business confidence softens
India’s Composite PMI output Index, which tracks manufacturing and services activity, fell to 57.1 in June from 59.3 in May. The reading represented the slowest expansion since March 2026.
Business confidence also slipped to a five-month low as companies cited rising competition, economic uncertainty and the depreciation of the rupee as key risks. Even so, most service providers remained optimistic that investments in equipment, marketing initiatives and new client enquiries would support business growth over the next 12 months.
