New Delhi: Amid softer demand, India’s dominant services sector moderated in March despite firms raising prices at the lowest rate in three-and-a-half-years, showing a slight deceleration in job creation. The HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, fell marginally to 58.5 from 59.0 in February, but was higher than a preliminary estimate that showed a fall to 57.7. However, it remained comfortably ahead of the 50-mark separating contraction from growth, a private survey showed on Friday.According to the survey, output was supported by buoyant underlying demand and ongoing increases in new business. “However, sales rose at a softer pace than in February. The slowdown in the growth of total new business reflected a weaker increase in international sales and new orders from abroad rose at the softest pace in 15 months. On the price front, output charge inflation slowed to a three-and-a-half-year low in March. Only 1 per cent of survey participants reported higher average fees than in February, with the remaining firms signalling no change,” the survey said.Commenting on the survey, Pranjul Bhandari, chief India economist at HSBC, said India recorded a 58.5 services PMI in March 2025, softening slightly from the month prior. “Domestic and international demand remained fairly buoyant, despite being sequentially a tick lower than the month before. Meanwhile, job creation and charge inflation both cooled during March. Looking ahead, business sentiment remains generally positive, but intensifying competition presents a significant challenge to many survey participants,” Bhandari said.Panellists in the survey also identified heightened competition as the main challenge for growth prospects going ahead. “The level of positive sentiment slipped to a seven-month low and was below its long-run average. Consumer services firms were the most upbeat in March, followed by finance & insurance, real estate & business services and transport, information & communication,” it noted.The survey also noted that hiring activity across the service economy was pared back in March. “Business confidence and job creation softened among goods producers and services companies. At the composite level, employment rose at the slowest pace in just under a year, whereas optimism faded to the weakest since October 2024,” it said.
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