India’s Services PMI Declines to 58.5 in March, Reflecting Moderation in Growth

India’s services sector experienced a slight moderation in growth during March 2025, as indicated by the HSBC India Services Purchasing Managers’ Index (PMI). The PMI fell to 58.5 from February’s 59.0, signaling a softer expansion in business activity and sales. Despite this dip, the index remained well above the 50-point threshold that separates growth from contraction.

The slowdown was attributed to marginally weaker domestic and international demand. New orders from abroad rose at the slowest pace in 15 months, reflecting vulnerabilities to global economic shifts. On the positive side, inflationary pressures eased, with input cost inflation rising at its slowest pace in five months. This led to the weakest increase in output prices since September 2021.

Hiring activity also slowed, with employment growth reaching its lowest level in nearly a year. Business sentiment dipped to a seven-month low, influenced by heightened competition and subdued optimism about future growth.

Overall, while the services sector continues to be a key driver of India’s economy, the moderation in growth highlights challenges such as competitive pressures and fluctuating demand conditions.