New Delhi | India’s services sector began 2026 on a strong note, with business activity accelerating in January as demand improved and companies stepped up hiring. According to data released by S&P Global, the HSBC India Services Purchasing Managers’ Index (PMI) rose to 58.5 in January, up from 58.0 in December, marking a solid expansion in the sector.
A PMI reading above 50 indicates growth, and the latest figure reflects stronger new business inflows and higher output across service industries.
Demand and Investment Drive Growth
HSBC’s Chief Economist for India, Pranjul Bhandari, said the improvement was driven primarily by robust domestic demand and a sharp rise in new orders. The report also highlighted increased investment in technology and marketing, which helped firms boost productivity and service delivery.
Strong Foreign Orders Support Momentum
Indian service providers also benefited from rising overseas demand. The survey noted a significant increase in new export orders from South and Southeast Asian markets, including Indonesia, Thailand, Malaysia, Vietnam, and Sri Lanka, as well as from Middle Eastern countries such as Oman and Qatar. This marked the strongest growth in international orders seen in the past three months.
Hiring Picks Up After December Slowdown
After a brief slowdown in hiring during December, companies resumed recruitment in January to manage higher workloads and prepare for future growth. Business confidence for the year ahead rose to a three-month high, reflecting optimism about demand conditions and economic stability.
Finance and Insurance Lead Sectoral Growth
Among service categories, the finance and insurance sector recorded the strongest expansion, leading both in new business generation and output growth.
Moderate Inflation Pressures
On the cost front, firms reported increases in input costs and output prices. However, inflationary pressures remained relatively mild and well below historical averages, suggesting that pricing conditions are largely under control.
Overall, the composite PMI, which combines manufacturing and services activity, also strengthened in January, underscoring the continued resilience of India’s economy at the start of 2026.