India’s services sector expanded at a faster pace in November. Strong domestic demand helped the industry recover after a softer performance in October. However, export sales growth weakened, falling to an eight-month low as global competition increased, according to a survey released on Wednesday.
The HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 59.8 in November, up from 58.9 in October. The index stayed above the 50-point threshold that signals growth for the 52nd straight month. Still, the reading came in slightly below the earlier flash estimate of 59.5.
The improvement was driven by a sharp rise in new business. New work increased at a rate stronger than the long-term trend.
However, international demand offered less support. New export orders grew at their slowest pace since March. Survey respondents pointed to tougher global competition and cheaper alternatives in other markets as key factors limiting export growth.
The data highlights a growing contrast in India’s economy. Domestic consumption continues to fuel services activity, even as manufacturing and external demand show signs of cooling.
Input cost inflation eased to its lowest level since August 2020. Small increases in food, electricity and software expenses kept overall cost pressures mild. This allowed service firms to restrain price increases. Output prices rose only slightly, marking the weakest inflation rate in more than four years.
This easing inflation trend supports expectations that the Reserve Bank of India may cut interest rates by 25 basis points this week.
Despite strong output growth, job creation stayed limited. About 95% of surveyed companies reported no change in staffing, suggesting that rising demand has not yet translated into meaningful employment gains.
Business confidence for the year ahead slipped to its lowest point since July 2022. Firms expressed caution due to competitive pressures.
The broader HSBC India Composite PMI, which includes both manufacturing and services, edged down to 59.7, its slowest expansion since May.
