India's services sector growth hits 5-month high in April as domestic market fuels activity: PMI

According to survey participants, competitive pricing, e-commerce and particularly strong customer demand for relocation and logistic services boosted sales growth.

New Delhi: India’s services activities posted its best performance at a five-month high in April, driven by strong domestic demand, even as export growth weakened and cost pressures remained elevated due to the West Asia conflict, as per an industry survey report released by S&P Global on Monday.

The Purchasing Managers’ Index (PMI) for services rose to 58.8 in April, after touching a 14-month low of 57.5 in March.

A PMI reading above 50 signals an expansion in the sector, whereas a value below 50 indicates contraction. The April PMI number is the best since November 2025.

Consumer Services led April’s expansion in new orders and output, followed by Transport, and Information & Communication.

According to survey participants, competitive pricing, e-commerce and particularly strong customer demand for relocation and logistics services boosted sales growth. The services PMI data is based on a survey conducted among around 400 companies in the services sector.

There was a strong recovery of both output and new order intakes during April. However, external sales expanded at the weakest pace in five months, dampened by the war and subdued inbound tourism.

“Activity and new orders strengthened, even as new export orders eased, suggesting that demand is rotating from overseas markets to domestic consumers amid the conflict,” said Pranjul Bhandari, Chief India Economist at HSBC.

Input cost inflation moderated, but remained elevated, while output price inflation stayed subdued, indicating that some firms are absorbing higher costs rather than passing them on, Bhandari added.

Surveyed firms cited greater food, gas and labour costs, as well as shortages of gas for jump in operating expenses. Only part of this additional cost burden was transferred through to customers, as signalled by an increase in selling prices that was moderate in comparison. The overall rate of charge inflation receded to a three-month low.

Worries surrounding the war and cost pressures dampened business sentiment. Still, companies recruited more workers at the start of the first fiscal quarter.