Services Sector Surges as India’s Growth Momentum Holds Strong

India’s services sector continues to power economic momentum, with the HSBC services PMI rising to 60.5 in July—its strongest reading in nearly a year. Domestic demand from sectors such as banking, insurance, and retail services remains robust, while export-driven segments like finance and IT services are seeing steady growth.

This uptick in services activity offsets soft manufacturing and fuels optimism within the business community. Although input costs are rising—due to inflation in food, logistics, and labor—companies are passing some of those onto clients. Employment growth remains moderate, but business confidence is picking up noticeably.

Experts say the sustained strength in services GDP should help India meet the IMF’s 6.4% growth forecast for 2025, positioning it as one of the bright spots globally. Still, concerns linger about rising inflation and global trade tensions. As the nation heads toward key policy reviews, services alone may defend growth against external shocks.