India’s services sector kicked off 2024 with robust momentum as the HSBC India Services PMI surged to 58.5 in January, marking a two-month high and up from December’s 58.0 reading. This key indicator, compiled by S&P Global, signals continued expansion well above the crucial 50-point threshold that separates growth from contraction.
The uptick was fueled by a sharp rise in new business inflows and accelerated output growth across the sector. Service providers reported a healthy recovery in business activity, buoyed by optimistic outlooks that prompted widespread hiring of additional staff. Even as input costs and selling prices climbed, the sector maintained its brisk pace, showcasing resilience amid inflationary pressures.
Demand surged from both domestic and international markets, with technology investments and effective marketing strategies playing pivotal roles. International orders, particularly from South and Southeast Asia including Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand, and Vietnam, added significant fuel to the fire. Output expansion reached its fastest pace in three months, underpinned by steady new order inflows.
HSBC Chief India Economist Pranjul Bhandari highlighted the sustained strength: ‘January’s 58.5 print underscores ongoing vigor in services, driven by robust domestic demand and burgeoning international interest.’ Business confidence soared to a three-month peak, supported by efficiency gains and new client acquisitions.
Despite rising prices—though moderate by historical standards—the composite PMI also strengthened, reflecting solid demand across manufacturing and services. This data paints a promising picture for India’s economic trajectory, with service providers gearing up for sustained growth through strategic expansions and workforce enhancements. As global uncertainties linger, the sector’s adaptability positions India favorably in the post-pandemic recovery landscape.