India’s Services PMI Slows to 53.3 in July 2026, Lowest Level in 53 Months

India's services sector continued to expand in July, although the pace of growth slowed to its weakest level in 53 months, according to the latest HSBC India Services Purchasing Managers' Index (PMI), as per news reports. 

The seasonally adjusted Services PMI Business Activity Index declined to 53.3 in July 2026 from 57.4 in June 2026. While the reading remained above the 50-point mark that indicates expansion, it represented the slowest growth in nearly four-and-a-half years. 

Demand Growth Loses Momentum 

New business inflows increased at their weakest pace since February 2022. 

Survey participants attributed the slowdown to fierce competition, softer market conditions, fading demand and postponed customer orders. Among the four service segments covered, finance and insurance was the only category to report faster growth in both output and sales. 

Exports and Hiring Stay Positive 

New export orders continued to grow at a solid pace and expanded faster than overall sales. 

Companies reported stronger demand from the United Arab Emirates, the United Kingdom and the United States. Hiring also improved after reaching a six-month low in June, although recruitment remained modest, with only 6% of surveyed firms increasing payrolls while 92% reported no change. 

Backlogs Fall as Firms Clear Pending Work 

With fresh bookings slowing, service providers reduced outstanding work at the fastest pace in nearly five years. 

Business confidence remained positive, supported by expectations of stronger demand, improving market conditions, competitive pricing strategies and higher inbound tourism. However, overall optimism eased to a seven-month low. 

Cost Pressures Ease 

Input costs continued to rise due to higher fuel, labour, material, technology and transportation expenses. 

However, input cost inflation eased to a six-month low. Despite softer cost pressures, companies increased selling prices at the fastest pace since April, led by real estate and business services, while consumer services recorded the weakest increase. 

The HSBC India Composite PMI Output Index fell to 54.3 in July from 57.1 in June, marking the weakest expansion since March 2022. 

Read More: Government Approved ₹4,687 Crore Interest Subsidy for Ethanol Projects Under Various Support Schemes! 

Conclusion 

July's PMI data showed slower growth in India's services sector as demand and new business moderated. However, continued export growth, hiring and easing cost pressures kept overall activity in expansion territory. 

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