India’s Services Sector Growth Slows Amid West Asia Conflict
PMI data: India’s services sector grows at slowest pace in 14 months as West Asia conflict hits demand
Mint
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India's services sector growth decelerated to its slowest pace in 14 months, with the HSBC India Services Purchasing Managers’ Index (PMI) dropping to 57.5 in March from 58.1 in February. The slowdown is attributed to the West Asia conflict impacting domestic demand, despite a record increase in international orders.
- 01The HSBC India Services PMI fell to 57.5 in March, indicating slowing growth.
- 02Domestic demand is affected by the ongoing conflict in West Asia.
- 03International orders saw a record increase, highlighting strong foreign demand.
- 04Input cost inflation reached its highest level since mid-2022.
- 05Job creation in the services sector hit its strongest pace since mid-2025.
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In March, India's services sector experienced its slowest growth in 14 months, with the HSBC India Services Purchasing Managers’ Index (PMI) declining to 57.5 from 58.1 in February. This slowdown is largely attributed to the adverse effects of the ongoing conflict in West Asia, which has impacted domestic demand and tourism. Despite this, the sector recorded a significant increase in international orders, with new export orders reaching their highest levels since mid-2024. Pranjul Bhandari, chief India economist at HSBC, noted that while demand remains resilient, input cost inflation has intensified, driven by rising fuel and logistics costs. The report also indicated a third consecutive monthly increase in employment, with job creation at its strongest since mid-2025, as firms expressed optimism about future activity. However, the overall growth in sales was the weakest since November 2023, reflecting a slowdown in the domestic market. The HSBC India Composite PMI Output Index also fell to 57.0, marking the weakest expansion rate in nearly three and a half years, with both service providers and manufacturers experiencing slower growth.
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The slowdown in the services sector may lead to reduced job security and slower wage growth for employees in this sector, as firms adjust to lower domestic demand.
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