India's services sector went in the right direction again in April with a marginal rise in the Services Purchasing Managers' Index (PMI) from 58.5 in March to 58.7, as marked by HSBC.
This reflects steady growth, with a PMI above 50 indicating expansion, and the index tracing an upward path reflecting steady improvement in the sector.
The boom was driven primarily by a sharp rise in new business orders, and most companies attributed strong market demand and effective advertising. Increased efficiency also allowed businesses to cope with heavier workloads. The finance and insurance sectors led the boom, registering highest growth in both production and new orders.
A strong push came from export demand, which bounced back from a temporary dip in March. Export orders for new ones rose at their fastest rate since July 2024 as mounting interest from Asian, European, West Asian, and US markets pushed them ahead. The rise succeeded in pushing service providers' margins higher as respite in cost burdens enabled them to raise prices at a faster rate.
HSBC chief India economist Pranjul Bhandari observed that services activity gained momentum in April due to strong new export orders and greater pricing power. While the pace of momentum continued to be optimistic, business optimism about growth in the near future softened slightly.
Expanding the economic landscape, India's Composite PMI, which averages services and manufacturing numbers, picked up to 59.7 in April from 59.5 in March, the strongest pace of growth since August 2024. The reading reflects strong private sector performance, underpinned by good performance in services and manufacturing.
In production, the HSBC India Manufacturing PMI was at 58.2 in April, up from 58.1 in March to a 10-month high. It rose after being at a 14-month low in February and was driven by higher production, more employment, and greater input purchases.
Moreover, India's Index of Industrial Production (IIP) recorded a modest rebound in March with 3% growth following a six-month low of 2.72% in February, indicating a gradual pick-up in industry.
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