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.