HSBC India Services PMI Falls To 57.3 In June 2026 Amid Slower Demand

The HSBC India Services Purchasing Managers’ Index (PMI) declined to 57.3 in June 2026 from 58.9 in May 2026. The May reading had marked a 6-month high, making the latest figure a notable moderation.

This also indicates the weakest growth in the services sector since January 2025. The slowdown reflects softer demand conditions alongside easing cost pressures.

HSBC India Services PMI June 2026 Key Highlights

The June 2026 PMI reading of 57.3 suggests that the services sector continued to expand, although at a slower pace compared to previous months. A PMI reading above 50 indicates expansion, while below 50 signals contraction, placing the current figure firmly in expansion territory.

However, the decline from May’s 58.9 highlights a loss in growth momentum. The data indicates a shift from strong expansion towards more moderate activity levels across the sector.

Why India Services PMI Declined in June 2026?

The moderation in PMI was largely attributed to softer demand conditions and increasing competitive pressures in the market. Companies reported challenges in securing new business, which led to a slowdown in new order growth.

Additionally, cost pressures, although easing, continued to influence business decisions and pricing strategies. These combined factors contributed to the weakest growth pace recorded since January 2025.

New Orders and Employment Trends in the Services Sector

New business inflows increased at a slower pace in June 2026, with some firms reporting difficulty in generating fresh demand. At the same time, outstanding business volumes remained broadly stable, indicating limited backlog growth.

Employment in the services sector continued to rise, reflecting ongoing business expansion, but at the slowest rate since December 2025. This suggests cautious hiring amid uncertainty in demand conditions.

Input Costs and Pricing Trends in June 2026 PMI

Both input costs and output price inflation showed signs of moderation during the month. Companies reported that easing cost pressures were partly due to softer demand and improved supply conditions.

At the same time, competitive market dynamics limited the ability to pass on cost increases to customers. As a result, pricing power weakened, contributing to stabilisation in inflation levels within the services sector.

Read More: India's Merchandise Exports Reached a Record High of $45.2 Billion in May 2026.

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Conclusion

The HSBC India Services PMI reading for June 2026 indicates continued expansion, albeit at a slower pace compared to recent months. Weakening demand and easing cost pressures played a significant role in shaping business activity.

While hiring and new orders continued to grow, the pace of growth moderated across key indicators. Despite the slowdown, overall business sentiment remained positive, reflecting expectations of sustained activity in the near term.

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