India's services sector activity picked up pace in April, inching up to 58.7 from 58.5 in March, driven by stronger increase in output, according to a private survey released Tuesday.
The HSBC India Services Business Activity Index remained above its long-run average of 54.2. Although, it was lower than 60.8 in April 2024.
Strong output was driven by rise in new business intakes, which survey respondents linked to favourable demand conditions and effective marketing. Among sectors, finance & insurance recorded the highest growth rates in both output and new orders.
"India services activity rose at a faster pace than last month. New export orders gained momentum after taking a breather in March, accelerating at its fastest pace since July 2024," said Pranjul Bhandari, India chief economist at HSBC.
Manufacturing activity also saw a modest pick up to 58.2 in April, the highest level in 10 months, from 58.1 in March, according to data released last week.
International demand, particularly from Asia, Europe, the Middle East, and the US, continued to support Indian services firms.
Employment increased for the 35th consecutive month in April, as companies hired both full and part-time employees to meet growing client demand, the survey said.
Input prices eased to its lowest level in six months at the start of FY26. While firms reported higher prices for chemical, cosmetic, fish and transportation, vegetable prices were noted to have declined.
"Indian services firms increased their average selling prices during April, as they sought to transfer higher cost burdens to clients," the survey mentioned.
Consumer service companies recorded the highest input cost pressures, but the fastest rise in prices charged was reported from finance & insurance companies.
"Margins improved as cost pressures eased and prices charged rose at a faster pace," said Bhandari.
Despite these gains, consumer sentiment fell to its lowest level in around two years."Though firms remained optimistic about future growth, their confidence waned slightly," noted Bhandari.
Although advertising, strong demand and productivity gains supported positive business confidence, competition remained a concern, according to the survey.
Overall, India's private sector activity expanded in April, with the HSBC India Composite Output Index increasing to 59.7 in April from 59.5 in March. "There were quicker increases at both goods producers and service providers," the survey said.
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Strong output was driven by rise in new business intakes, which survey respondents linked to favourable demand conditions and effective marketing. Among sectors, finance & insurance recorded the highest growth rates in both output and new orders.
"India services activity rose at a faster pace than last month. New export orders gained momentum after taking a breather in March, accelerating at its fastest pace since July 2024," said Pranjul Bhandari, India chief economist at HSBC.
Manufacturing activity also saw a modest pick up to 58.2 in April, the highest level in 10 months, from 58.1 in March, according to data released last week.
International demand, particularly from Asia, Europe, the Middle East, and the US, continued to support Indian services firms.
Employment increased for the 35th consecutive month in April, as companies hired both full and part-time employees to meet growing client demand, the survey said.
Input prices eased to its lowest level in six months at the start of FY26. While firms reported higher prices for chemical, cosmetic, fish and transportation, vegetable prices were noted to have declined.
"Indian services firms increased their average selling prices during April, as they sought to transfer higher cost burdens to clients," the survey mentioned.
Consumer service companies recorded the highest input cost pressures, but the fastest rise in prices charged was reported from finance & insurance companies.
"Margins improved as cost pressures eased and prices charged rose at a faster pace," said Bhandari.
Despite these gains, consumer sentiment fell to its lowest level in around two years."Though firms remained optimistic about future growth, their confidence waned slightly," noted Bhandari.
Although advertising, strong demand and productivity gains supported positive business confidence, competition remained a concern, according to the survey.
Overall, India's private sector activity expanded in April, with the HSBC India Composite Output Index increasing to 59.7 in April from 59.5 in March. "There were quicker increases at both goods producers and service providers," the survey said.
