India’s services PMI rises to four-month high of 55.8 in October, but hiring

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India’s service providers reported stronger domestic demand and lower cost pressures, while subdued export orders and slower recruitment tempered business optimism.

By BL New Delhi Bureau

Updated - November 04, 2026 at 03:19 PM.

FILE PHOTO: India’s services sector recorded stronger business activity in October, even as employment growth and export order expansion slowed. | Photo Credit: Reuters

Amid a cautious business environment, India’s services sector performed well as the Purchasing Managers’ Index (PMI) rose to 55.8 in October, a survey report by S&P Global showed. However, the job market news was less optimistic.

PMI was 55.2 in September.

Services PMI rises to a four-month high

“India’s services PMI rose to 55.8 in October, a four-month high, as business conditions improved cautiously,” Pranjul Bhandari, HSBC’s Chief India Economist, said. However, not everything was good. Although “overall demand remained strong, new export orders recorded the slowest pace of expansion since February 2023,” she said. PMI is derived from responses from purchasing managers at 400 firms. An index above 50 means expansion, while below 50 means contraction.

The survey results revealed that services companies made inroads into their backlogs. Unfinished business volumes decreased for the third time in the past four months, albeit only moderately. Consequently, employment growth eased during October. The rate of increase was the joint weakest in the current ten-month period of job creation and was only fractional overall. “Employment growth also slowed to its weakest pace since June, suggesting that some service sector businesses have sufficient capacity to meet current staffing requirements,” Bhandari added.

Finance and insurance lead growth across services

According to the survey report, all four broad areas of the service economy tracked by the PMI survey recorded faster expansions in new business and output, with Finance & Insurance leading in both cases. Real Estate & Business Services ranked last. Underlying data showed that India’s domestic market was the main source of sales growth in October.

Export orders expand at slowest pace since February 2023

Although new export business increased, the expansion rate was marginal and the weakest since February 2023. “Offering respite to firms, input costs rose at a negligible pace that was the weakest in over six years and well below its trend. Some firms reported greater outlays on electricity, labour, raw materials and transportation,” the report said.

Input cost inflation eases, selling prices rise marginally

Cost pressures were most intense in the Consumer Services segment, the only category to see a stronger upturn in input prices than in September. The softest rate of inflation was in Finance & Insurance. Fewer than 3% of Indian service providers opted to increase their selling prices at the start of the third fiscal quarter, citing the pass-through of cost rises to clients. Overall rate-of-charge inflation was marginal and the slowest since June.

When asked about the outlook, respondents were confident output would rise over the coming 12 months. That said, “the level of positive sentiment fell in October and thus remained below its long-run average,” the report said.

Published on November 4, 2026

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