India’s Services PMI Slips to 60.9 In September from 15-Year High Of 62.9

India’s services sector growth eased in September, with the HSBC India Services Purchasing Managers’ Index (PMI) declining to 60.9, down from a 15-year high of 62.9 recorded in August, according to data released on October 6, 2025. Despite the dip, the index remained well above the 50-mark for the fourth consecutive month, signalling robust expansion and continued strength in domestic demand. 

Services Expansion Remains Broad-Based 

The September PMI reading pointed to strong but moderating activity across major service industries, including finance, real estate, and information technology. Firms reported sustained new business inflows and rising client demand, though the pace of growth softened marginally from the previous month’s highs. 

The PMI survey highlighted steady job creation, increased output, and ongoing confidence in the business outlook. However, some companies indicated that rising input costs and capacity pressures affected their overall activity levels. 

Even with the moderation, India’s services sector continues to outperform manufacturing, reflecting its growing importance as the key engine of economic expansion. 

Manufacturing Activity Slows in Comparison 

The services sector’s resilience was underscored by a sharper slowdown in manufacturing activity. The HSBC India Manufacturing PMI fell to 57.7 in September from 59.3 in August, marking a four-month low. 

Economists noted that weaker global demand and a slowdown in merchandise exports have weighed on manufacturing output, while domestic consumption and services activity have remained comparatively strong. As a result, services continue to anchor overall growth momentum in the Indian economy. 

Economic Outlook Supported by Services 

At the Kautilya Economic Conclave, held from October 3 to 5, several global experts observed that India’s services sector, particularly IT, financial, and digital services, will play a pivotal role in the country’s long-term growth trajectory. They emphasised that service-led innovation and export competitiveness will be central to India’s goal of becoming a developed economy by 2047. 

The sector’s steady expansion is also being supported by structural reforms, digitalisation, and policy initiatives aimed at improving ease of doing business and attracting global clients to Indian service providers. 

Growth Forecast Revised Upward 

Last week, the Reserve Bank of India (RBI) raised its GDP growth forecast for FY26 to 6.8%, up from the earlier estimate of 6.5%, citing stronger domestic activity and improving demand conditions. The central bank also projected growth of around 7% in the second quarter of FY26. 

India’s economy expanded 7.8% in the first quarter of the current fiscal year, underscoring broad-based strength across key sectors despite global challenges. 

Read More: ADB Cuts India's FY26 Growth Forecast to 6.5% 

Conclusion 

While September’s PMI data signals a slight moderation in services momentum, the sector remains firmly in expansion territory. Supported by sustained demand and favourable macroeconomic conditions, India’s services industry continues to underpin overall economic growth and provide stability amid global uncertainty. 

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