India’s services sector expanded at a slightly faster pace in August 2026, with the seasonally adjusted HSBC India Services Purchasing Managers’ Index rising to 54.1 from 53.3 in July. A reading above 50 indicates expansion, while one below 50 signals contraction.
Growth improved but remained subdued
The survey, compiled by S&P Global from responses collected between August 6 and 26, showed that services activity continued to grow. However, the index remained below its long-run average of 54.5, and Reuters described the pace as close to a four-year low.
New business improved, but competition and uneven demand continued to limit momentum. Export orders were broadly stable, with firms reporting gains from markets including Australia, Canada and the United Arab Emirates.
Hiring was the stronger signal
Employment rose at the fastest rate in 15 months. Financial Express reported that about 11% of surveyed companies added staff, including roles connected with customer service and digital operations. The employment result suggests that some businesses were preparing for future activity even though current output growth remained relatively restrained.
PMI employment data measure the direction and breadth of change among surveyed companies; they are not the same as an official count of jobs created across the economy. The survey therefore offers an early signal rather than a complete labour-market picture.
Costs and selling prices increased
Businesses reported higher spending on areas such as digital platforms, marketing and regulatory compliance. Service providers raised their charges at the fastest pace since March, according to the survey coverage. Price increases can protect company margins, but they may also affect customers and influence the broader inflation outlook if they persist.
Composite activity remained soft
The combined services and manufacturing reading was 54.3, unchanged from July and among the weakest rates of private-sector expansion in several years. Services improved, but slower manufacturing prevented a stronger composite result.
The figures do not show that India’s services economy is shrinking. They show continued expansion at a pace that is weaker than much of the recent historical period. That distinction is important when interpreting claims about a “slowdown.”
What the data mean
Services account for a large share of India’s economic activity, so stronger orders and hiring would support growth if sustained. Policymakers and businesses will watch whether domestic demand improves further, whether export business strengthens and whether rising input costs continue to be passed on through higher prices.
