India Services Growth Slows to 14-Month Low Amid West Asia Tensions
India’s services sector expanded at its weakest pace in 14 months in March, as geopolitical tensions in West Asia dampened domestic demand, according to the latest survey data. The HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, eased to 57.5 from 58.1 in February, though it remained above the preliminary estimate of 57.2. While the sector continued to show expansion, the pace of growth slowed notably amid softer market conditions and reduced consumer demand.
The survey highlighted that new business growth, a key indicator of demand, rose at its slowest rate since January 2025, with firms citing increased competition, challenging market dynamics, and weakening domestic demand. The ongoing conflict in West Asia also impacted tourism and overall business activity. However, international demand remained resilient, with growth in foreign orders reaching its second-highest level since data collection began in September 2014.
Cost pressures intensified significantly, with input costs rising at the fastest pace in 45 months. Although firms raised prices at the quickest rate in seven months, they were unable to fully pass on the increased costs to clients, leading to margin pressures. Despite these challenges, employment expanded for the third consecutive month at its strongest pace since June 2025, supported by improved business confidence, which reached a near 12-year high. Meanwhile, combined with a slowdown in manufacturing, the Composite PMI dropped to 57.0 from 58.9, marking the weakest overall expansion in nearly three-and-a-half years.
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