India’s Services PMI Slips To 58.1 In February as New Order Growth Softens

India’s services sector recorded a slight moderation in activity in February, with the headline HSBC India Services PMI softening to 58.1 from 58.5 in January 2026. The deceleration reflected slower domestic new order growth, marking the weakest rise since January 2025.

Despite this, the index remained well above the 50‑level that separates expansion from contraction. Export demand strengthened, helping offset softer domestic conditions.

Overall Services Activity Maintains Expansion

The survey signalled that the services economy continued to expand at a firm pace despite the slight dip in momentum. The moderation in the headline number was driven primarily by softer new domestic business rather than a broad reduction in output.

Firms reported stable activity supported by efficiency gains and technology‑led initiatives. Increased hiring compared with January indicated confidence in managing ongoing workloads.

Domestic And International Demand Trends

Domestic new orders recorded their slowest increase in 13 months, reflecting a moderation in local demand conditions. Despite this, businesses continued to record growth in overall new work volumes.

Export demand strengthened significantly, rising at the fastest pace since August 2025. Firms reported increased international sales from key markets including Canada, Germany, mainland China, Singapore, the UAE, the UK and the US.

Sectoral Performance and Cost Dynamics

Performance varied across service industries, with finance and insurance delivering the strongest increases in both output and new orders. Real estate and business services recorded comparatively weaker growth, reflecting sector‑specific demand differences.

Input cost inflation accelerated, driven primarily by higher food and labour‑related expenses. Companies raised output prices at a quicker pace to offset these pressures.

Business Sentiment and Workforce Trends

Business confidence rose to its highest level in a year, supported by expectations of stable demand and plans to expand market presence. Firms continued to increase staffing levels, indicating readiness for sustained activity. Survey respondents highlighted that efficiency improvements and rising sales supported overall growth momentum. The combination of steady workloads and stronger optimism contributed to a stable operating environment.

Read More: India’s Economy Expands 7.8% In Q3 Under New GDP Series.

Conclusion

India’s services PMI eased to 58.1 in February, reflecting a marginal slowdown from January’s reading. Domestic new orders softened to a 13‑month low, but export demand remained a key source of strength.

Sectoral trends showed varied performance, with finance and insurance leading gains and real estate lagging. Despite rising input costs, business sentiment improved, and the sector continued to expand at a solid pace.

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