Services activity in India expanded at a rapid pace in April, marking a five-month high. This growth was supported by stronger domestic demand, higher ecommerce activity, and improved new order inflows, according to the HSBC India Services PMI. The seasonally adjusted index rose to 58.8 in April after touching a 14-month low of 57.5 in March.
The spike in the HSBC India Composite PMI Output Index signalled faster expansion in private sector output as both manufacturing and services activity regained momentum.
The survey highlighted that growth was driven by stronger domestic demand, new orders, competitive pricing, and increased ecommerce activity, even as export growth weakened and cost pressures remained elevated due to the West Asia war.
Services firms reported a sharp increase in operating expenses in April. Although input cost inflation eased from March, it remained among the highest levels recorded since November 2024.
Higher prices for food items, including cooking oil, eggs, gas shortages, meat and vegetables along with increases in gas and labour costs, drove overall expenses, it added.
Services firms remained optimistic about future activity, but overall business confidence weakened compared with March, it added.
Employment rose across all four broad areas of the services economy tracked by the survey. Stronger growth in new business supported an increase in hiring at the start of the first fiscal quarter.
Private sector manufacturing activity growth recovered in April as HSBC’s India Manufacturing Purchasing Managers’ Index (PMI)—compiled by S&P Global, which measures monthly change in manufacturing output—rose to 54.7 in April, up from 53.9 in March.
The growth was supported by sharper export growth after plummeting to a four-year low in March due to West Asia-linked disruption.
A weighted average of the indices for new orders, output, employment, suppliers’ delivery times and stocks of purchases was lower than the Flash India Manufacturing PMI of 55.9, released last month.