India's Services Sector Returned to Growth in April
Tuesday, 06 May 2025, 15:05 IST
India's services sector returned to growth in April following a V-shaped rebound from a slowdown in March, boosted by new business and output gains, a private poll revealed on Tuesday.
The seasonally adjusted HSBC India Services PMI last month increased to 58.7 from 58.5 in March and remained well above the 50-mark that indicates expansion after February's 59.
The index was at 56.5 in January, 59.3 in December, 58.4 in November, 58.5 in October, and 57.7 in September.
Indian business activity in the services sector gained somewhat in April after a March decline, fueled by a quicker increase in new orders and a parallel increase in employment, the survey reported.
Capacity pressures increased with a firm increase in unsolved work, and average charges rose at a quicker rate even as cost pressures moderated to a six-month low, it further stated.
"India services activity picked up at a quicker rate than during the previous month. New orders for exports picked up after a pause in March and moved at the quickest rate since July 2024," HSBC chief India economist Pranjul Bhandari stated.
"Margins improved as cost pressures eased and prices charged rose at a faster pace. Though firms remained optimistic about future growth, their confidence waned slightly," she added.
India’s services sector a pillar of its economy accounts for more than half of its gross domestic product (GDP).India’s economy grew 8.2% in 2023–24, driven by a strong 7.8% expansion in the January–March quarter, surpassing the RBI’s 7% forecast.
But expansion slowed in 2024–25, slowing to 6.7% in the first quarter and further to 5.4% in the second its weakest rate in almost two years due to slow manufacturing, subdued urban consumption, and poor corporate earnings.
India's growth pace accelerated in the December quarter (Q3FY25) after a slowdown in Q2, with GDP growing 6.2% the weakest rate since Q4FY23, except for the previous quarter's revised 5.6%.
The Reserve Bank of India (RBI) is predicting 6.5% growth for FY26 on the back of rural demand, government spending, and strong services exports.
India's manufacturing activity expanded at a 10-month high in April, driven by high demand and increasing output. The HSBC India Manufacturing PMI, prepared by S&P Global, was at 58.2 in April, up from 58.1 in March and 56.3 in February. A reading greater than 50 indicates expansion.
The HSBC India Composite Output Index increased to 59.7 in April from 59.5 in March and 58.8 in February the quickest growth since August 2024.
"Private sector new business volumes grew at the quickest rate in eight months, supported by an acceleration in growth across the services economy. The revival at the goods producers was largely comparable to March," said the survey.
"Both manufacturing companies and their services counterparts recorded quicker increases in new export orders. At the composite level, the growth rate was at a nine-month high," it further said.
The seasonally adjusted HSBC India Services PMI last month increased to 58.7 from 58.5 in March and remained well above the 50-mark that indicates expansion after February's 59.
The index was at 56.5 in January, 59.3 in December, 58.4 in November, 58.5 in October, and 57.7 in September.
Indian business activity in the services sector gained somewhat in April after a March decline, fueled by a quicker increase in new orders and a parallel increase in employment, the survey reported.
Capacity pressures increased with a firm increase in unsolved work, and average charges rose at a quicker rate even as cost pressures moderated to a six-month low, it further stated.
"India services activity picked up at a quicker rate than during the previous month. New orders for exports picked up after a pause in March and moved at the quickest rate since July 2024," HSBC chief India economist Pranjul Bhandari stated.
"Margins improved as cost pressures eased and prices charged rose at a faster pace. Though firms remained optimistic about future growth, their confidence waned slightly," she added.
India’s services sector a pillar of its economy accounts for more than half of its gross domestic product (GDP).India’s economy grew 8.2% in 2023–24, driven by a strong 7.8% expansion in the January–March quarter, surpassing the RBI’s 7% forecast.
But expansion slowed in 2024–25, slowing to 6.7% in the first quarter and further to 5.4% in the second its weakest rate in almost two years due to slow manufacturing, subdued urban consumption, and poor corporate earnings.
India's growth pace accelerated in the December quarter (Q3FY25) after a slowdown in Q2, with GDP growing 6.2% the weakest rate since Q4FY23, except for the previous quarter's revised 5.6%.
The Reserve Bank of India (RBI) is predicting 6.5% growth for FY26 on the back of rural demand, government spending, and strong services exports.
India's manufacturing activity expanded at a 10-month high in April, driven by high demand and increasing output. The HSBC India Manufacturing PMI, prepared by S&P Global, was at 58.2 in April, up from 58.1 in March and 56.3 in February. A reading greater than 50 indicates expansion.
The HSBC India Composite Output Index increased to 59.7 in April from 59.5 in March and 58.8 in February the quickest growth since August 2024.
"Private sector new business volumes grew at the quickest rate in eight months, supported by an acceleration in growth across the services economy. The revival at the goods producers was largely comparable to March," said the survey.
"Both manufacturing companies and their services counterparts recorded quicker increases in new export orders. At the composite level, the growth rate was at a nine-month high," it further said.
