India's services sector rebounded in April 2026, with the HSBC India Services PMI Business Activity Index climbing to 58.8, up from 57.5 in March. This marks the fastest growth since November 2025, primarily driven by robust domestic demand and increased e-commerce activity. The shift from international to domestic suppliers, influenced by ongoing geopolitical tensions in the Middle East, particularly benefitted transport services. New business inflows surged, especially in Consumer Services, Transport, and Information & Communication sectors. However, external demand weakened, with export growth dropping to a five-month low due to the conflict and reduced inbound tourism. The New Export Business Index fell significantly, reaching one of its lowest points in over a year. Although cost pressures remained high, they eased slightly compared to March, with firms facing increased expenses for food, fuel, gas, and labor. Companies managed to pass on only some of these cost increases to customers, leading to a moderate rise in selling prices, the weakest in three months. Despite a positive business outlook, confidence softened due to concerns over rising costs and geopolitical uncertainties. Employment increased across all service segments, helping firms to slightly reduce backlogs, while the composite PMI rose to 58.2, indicating strong overall private sector growth, albeit at one of the slowest paces in two-and-a-half years.