India Services Growth Accelerates, Export Growth Slides
By Reuters | 02 Dec, 2025

Domestic demand restored strong growth for the services sector in November but growing international competition slowed export growth to the lowest level since March.

India's dominant services sector accelerated in November as robust domestic demand helped recover ground lost in the previous month, but export sales growth slipped to an eight-month low amid rising global competition, a survey showed on Wednesday.

HSBC's India Services Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 59.8 last month from October's 58.9. The reading remained above the 50-mark separating growth from contraction for the 52nd consecutive month, though it trailed the preliminary estimate of 59.5.

The upturn was underpinned by a sharp increase in new business intakes, which grew faster than the long-run average.

However, international demand provided less support with new export orders expanding at the slowest pace since March. Survey participants noted growth was constrained by fierce competition and the availability of cheaper services in other markets.

The data highlights a divergence in the economy, where domestic consumption continues to drive services activity even as the manufacturing sector and export demand face moderation.

Input cost inflation retreated to its lowest level since August 2020, the service PMI showed, despite marginal increases in food, electricity and software expenses. This moderation allowed service providers to limit price hikes, with prices charged showing only a negligible uptick - the inflation rate was the weakest in over four years.

The benign inflation outlook supports expectations the Reserve Bank of India will cut rates by 25 basis points this week.

Despite the rise in output, employment growth remained modest. Around 95% of surveyed firms reported no change in payroll numbers, indicating expansion in activity is yet to translate into significant job creation.

Business confidence regarding the 12-month outlook slipped to its lowest level since July 2022 as firms expressed caution regarding competitive pressures.

The broader HSBC India Composite PMI, which measures both manufacturing and services, eased to 59.7 - the slowest growth since May. 

(Reporting by Anant ChandakEditing by Shri Navaratnam)