On the job front, service providers generally found that payroll numbers were sufficient for current requirements and hiring was broadly paused
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STRINGER/INDIA
India’s critical services sector, the largest driver of the country’s Gross Value Added (GVA), recorded a growth deceleration in June. Data released by S&P Global on Friday showed the services PMI dropped to 57.4, down two full points from the 59.8 registered in May.
The June print is the lowest in 17 months.
“India’s services PMI remained in expansionary territory but eased to 57.4 in June, the lowest reading in 17 months. The loss of momentum points to more challenging market conditions and weaker demand, particularly at home,” Pranjul Bhandari, Chief India Economist at HSBC, said. The index is derived based on responses from purchasing executives of 400 companies. Index above 50 means expansion, while below 50 reflects contraction.
One area of strength seen in June was exports, with firms seeing the strongest rise for three months. According to them, demand from clients in Australia, Belgium, Canada, Germany, Malaysia, Nepal, Oman, Qatar, Singapore, the UAE and the US improved. “External demand held up well as overseas sales stayed robust and growth reached a three-month high,” Bhandari said.
On the prices front, the rate of inflation was slight, below its long-run average and the weakest since November 2025. “Price pressures also continued to cool, with both input cost and output charge inflation moderating as geopolitical disruptions in the Middle East began to subside,” Bhandari said.
On the job front, service providers generally found that payroll numbers were sufficient for current requirements and hiring was broadly paused. Indian services firms foresee output growth in the coming 12 months, but the overall level of positive sentiment fell to a five-month low and was below the historical trend, the survey noted.
Composite PMI
Meanwhile, the HSBC India Composite PMI Output Index fell to 57.1 in June from 59.3 in May, indicating a broad-based slowdown in growth as business activity, employment and new orders across India’s private sector rose at weaker rates in June, with softer expansions recorded in the manufacturing and service economies. Composite PMI indices are weighted averages of comparable manufacturing and services PMI indices. Weights reflect the relative size of the manufacturing and service sectors according to official GDP data.
Aggregate sales volumes rose at the weakest pace in three months, while job creation slipped to its softest in 2026 so far. Concurrently, external orders expanded to the least extent in close to two years. “Reflecting the broader slowdown, India’s composite PMI fell slightly to 57.1 in June from 59.3 in May, alongside softer sales volumes, slower job creation and more subdued pricing,” Bhandari said.
Published on July 3, 2026
