India's services industry had its quickest expansion in 15 years during August, driven by strong demand, resulting in the steepest increase in service provider prices in more than a decade, a report issued on Wednesday showed.
HSBC's India Services Purchasing Managers' Index (PMI), as put together by S&P Global, rose to 62.9 during August from 60.5 in July. (Above 50 represents growth, below 50 indicates decline.)
HSBC's Chief India Economist Pranjul Bhandari mentioned that India's Services PMI Business Activity Index in the previous month was at a record high for fifteen years, led significantly by a surge in new orders.
New orders, an important gauge of demand, grew at its quickest rate since June 2010. Overseas demand was also firm, as export orders recorded their strongest expansion in 14 months, the report further stated.
Surging international demand enabled service providers to increase prices more forcefully. Output inflation in prices reached its highest since July 2012, while input costs accelerated at their quickest in nine months.
The rising price pressures imply overall inflation, which had declined to an eight-year low of 1.55% in July, may have reached its trough and is poised to turn higher.
Business sentiment for the next year reached a three-month high, boosted by robust spending on advertising and upbeat expectations of demand.
The Composite PMI covering services and manufacturing activity rose to 63.2 in August from 61.1 in July. This is a 17-year high, reflecting robust economic momentum in India's top industries.
India's GDP accelerated by 7.8% during Q1 FY26, solidifying its status as the fastest-growing large economy, supported by services and manufacturing gains as well as by beneficial monsoon conditions.
On September 2, HSBC Global Investment Research set a 'neutral' position on India, observing that five out of nine Indian market risk factors are improving.
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