New orders and export demand lift January PMI to 58.5, but job growth remains near-stagnant
India’s services sector regained momentum in January after slipping to an 11-month low in December, helped by stronger demand and a pickup in new business, a private survey showed on Wednesday.
The HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 58.5 in January from 58 in December. The reading marked the 54th straight month of expansion — the longest streak since the survey began in 2005 — although it came in below the preliminary estimate of 59.3.
A PMI reading above 50 indicates expansion, while below 50 signals contraction.
The improvement was largely driven by faster growth in new orders, which expanded at their quickest pace since November. Companies attributed the rise to stronger online presence and aggressive marketing efforts that boosted sales.
“Robust output growth was driven by a steady influx of new orders, including increased international demand from South and Southeast Asia,” said Pranjul Bhandari, chief India economist at HSBC.
Export demand also improved, with new overseas business growing at the fastest pace in three months. Survey participants cited higher demand from countries such as Indonesia, Qatar, Sri Lanka and Vietnam.
The data was collected between January 9 and 28, ahead of recent global trade developments. India last month signed a trade deal with the European Union, while US President Donald Trump on Monday announced an agreement to cut US tariffs on Indian goods to 18 per cent from 50 per cent — moves that could further support export-oriented services in the coming months.
However, despite the uptick in activity, hiring remained subdued. Employment returned to growth after contracting in December, but the pace of job creation was marginal, signalling near-stagnant labour market conditions.
At the same time, cost pressures intensified. Input prices rose at their fastest pace since September, driven by higher costs of food, electronics and paper. Service providers passed on part of the burden to customers, pushing output charges to a three-month high.
Business sentiment about the year ahead improved to a three-month high, with firms optimistic about efficiency gains and new client acquisitions.
Reflecting broader economic momentum, the HSBC India Composite PMI — which combines services and manufacturing — rose to 58.4 in January from 57.8 in December, indicating sustained expansion at the start of 2026.
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