India’s services sector growth slows to two-year low in January: Industry survey

India’s services sector grew at its slowest pace in over two years in January, according to the HSBC India Services PMI Business Activity Index published on Wednesday by United States-based financial analytics firm S&P Global.

The seasonally adjusted index, which tracks month-on-month changes in services and manufacturing output, fell to 56.5 in January from 59.3 in December – the lowest since November 2023. A value above 50 indicates expansion, while below 50 signals contraction in economic activity.

The slowdown was driven by weaker sales and output growth.

“Even though the index remained above 50, the services sector lost momentum,” said Pranjul Bhandari, chief India economist at HSBC. “Business activity and new business indices eased to their lowest since November 2022 and November 2023, respectively.”

Bhandari added: “That said, new export business partly countered the downtrend and continued to rebound from a dip in late-2024, in line with official data which showed India’s services exports shining in December and capturing a larger share of global trade.”

In contrast to the trend for total new orders, there had been a quicker increase in international sales, the report said. The report noted that international sales grew at their fastest pace in five months, with gains from clients in Asia, Europe, West Asia and the Americas.

On January…

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