India's Services PMI Reaches 4-Month Peak in October 2026

India's services sector saw its activity expand at the fastest pace in 4 months in October 2026, as indicated by the HSBC India Services PMI, as per news reports.  

The index rose to 55.8 from 55.2 in September, supported by stronger domestic demand and new business orders. Input cost inflation eased to its lowest level in over 6 years. 

Domestic Demand Boosts Services Sector 

The rise in the Services PMI to 55.8 in October was largely driven by domestic demand. New business orders increased at the quickest rate in 4 months, with survey participants attributing this to favourable demand conditions, new client acquisitions, and effective advertising campaigns.  

Despite this, the pace of hiring slowed to a 4-month low, and growth in international sales weakened to its slowest since February 2023. 

Sector Performance and Inflation Trends 

All 4 broad segments of the services sector reported faster increases in business activity and new orders. Finance and Insurance led the expansion, while Real Estate and Business Services saw the slowest growth.  

Input cost inflation fell to its lowest since August 2020, although some firms reported higher expenses on electricity, labour, raw materials, and transportation.  

Consumer Services experienced the most pronounced cost pressures, while Finance and Insurance recorded the weakest inflation. 

Read More: Central Government Proposes New Import Locations in 5 States for Drugs, Medical Devices and Cosmetics! 

Hiring and Business Confidence 

Employment growth in the services sector eased, with the pace of job creation being the joint-weakest in the current 10-month period. Companies reduced their outstanding workloads, leading to a moderate decline in unfinished business.  

Business confidence weakened, with service providers remaining optimistic about output growth over the next 12 months, though the level of positive sentiment declined from September. 

Composite PMI and Sectoral Insights 

The HSBC India Composite PMI Output Index rose to 56.2 in October from 55.9 in September, marking the fastest rise in aggregate output in 4 months. While manufacturing output growth moderated, it continued to outpace the services sector.  

New business orders across the private sector increased at their fastest rate since June, although employment growth softened. Inflationary pressures eased across both sectors, with input cost inflation falling to an 11-month low. 

Conclusion 

In October 2026, India's Services PMI rose to 55.8, driven by domestic demand and new business orders. Input cost inflation eased to a 6-year low, while employment growth slowed. The Composite PMI increased to 56.2, reflecting strong private sector activity. 

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