HSBC’s final India Services Purchasing Managers Index (compiled by S&P Global) fell to 58.5 last month from 59.0 in February, but above preliminary estimates, which showed a drop to 57.7.
However, it maintains a comfortable attitude, leading the way above 50 marks, separates contraction from growth.
“Although it is lower in turn from the previous month, domestic and international demand remains quite floating,” said Pranjul Bhandari, chief Indian economist at HSBC.
Domestic demand remains the main driver, although new businesses showed solid growth compared to February, albeit at a smaller pace.
Foreign demand has eased, with international orders being the slowest in 15 months, indicating the potential vulnerability of global economic transformation, including tariff measures recently announced by U.S. President Donald Trump. Inflation pressures declined, and the rate of investment costs rose at the slowest rate in five months. With fierce competition, this has led to the weakest rise in output prices since September 2021. The competitive landscape suppressed business sentiment in the coming year, but the future activity index cooled to a seven-month low, affecting employment growth. Hiring additional employees slowed the lowest rate in less than a year.
“Looking forward, business sentiment is generally still positive, but intensifying competition presents significant challenges for many survey participants,” Bhandari added.
HSBC India Comprehensive PMI (including strong manufacturing growth) was a seven-month high in March starting from February 58.8 to 59.5, reflecting overall private sector growth.
Manufacturing growth exceeds service services, but both sectors make job growth and business confidence available.
Weak inflation and poor business confidence could force the RBI to lower it by 25 basis points on April 9 to support an economy that could grow at the slowest pace in the last fiscal year in four years.
