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India’s services sector growth accelerates in May with rebound in external demand
Jun-03-2026

India’s services sector continued to witness robust expansion in the month of May 2026, with strengthening demand for services such as freight, digital solutions, e-commerce, entertainment and IT. External demand for India-provided services also grew at a faster pace, rebounding after a sharp decline in April. As a result, companies lifted activity to a greater extent and continued to add to payroll numbers.

According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index surged to 59.8 in May from 58.8 in April. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also jumped to 59.3 in May as against 58.2 in April. Besides, input cost inflation eased, which in turn reduced pressure on selling prices.

There was a negligible uptick in outstanding business volumes at Indian service providers during May. Regarding the 12-month outlook for business activity, services firms collectively expressed optimism. They generally expect demand conditions to remain favourable and therefore support output. However, the overall level of confidence slipped to a three-month low and was below the historical trend.


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