India's Service Sector: A Slowdown Yet Growth Continues

India's services sector saw its slowest growth in over two years in January, according to the HSBC India Services PMI survey. The PMI index dipped, although it remained above the expansion threshold. Export business showed improvement, and job creation accelerated, despite rising operational costs and subdued domestic demand.

India's services sector growth hit a 26-month low in January, as revealed by the HSBC India Services PMI survey. The PMI index fell from 59.3 in December to 56.5 in January, indicating a slowdown. Despite this, growth continued, mainly fueled by an uptick in international sales.

Key findings from the survey showed that while total new orders slowed down, international demand saw a resurgence. Clients from across Asia, Europe, the Middle East, and the Americas contributed to this boost, counterbalancing the sluggish domestic orders.

The ongoing demand pressure led to strong job creation at the beginning of the fiscal quarter, marking one of the most rapid employment uptakes since data tracking began. Rising expenses, especially staff and food costs, contributed to increased service pricing, as firms worked to maintain profitability amidst economic shifts.