India's service sector clocks highest rate of growth in six months; PMI at 61.8 in January

Service PMI: India's service sector witnessed highest growth in six months with its Purchasing Manager's Index (PMI) at 61.8 in January. In December the PMI was at 59. It is the highest since July 2023 when the PMI was 62.3 The service sector in India has been expanding for two and a half years now.

"India's services PMI rose to a six-month high in January. New business expanded at a faster pace and managers' expectation for future activity was strong," said Ines Lam, economist at HSBC

Service sector grows

As per the HSBC report, advertising, positive demand trends and new client wins reportedly fuelled sales in the service sector. The data also showed an uptick in new export orders, with January witnessing the highest in three months. The top clients were Afghanistan, Australia, Brazil, China, Europe, the UAE and the US.

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"The new export business index accelerated, signalling that India's services exports remained robust," said Ines Lam, economist at HSBC

The report further mentioned that even though jobs increased in January to the highest in three months, the rate of inflation was the fastest in five months due to higher food, freight and salary costs.

A PMI of above 50 indicates expansion and below 50 indicates contraction