Strong export demand pushes India’s services PMI to three-month high of 58.8 in May

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Strong export demand pushes India’s services PMI to three-month high of 58.8 in May

NOOR MOHMMED

05/Jun/2025

HSBC India Services PMI for May 2025 rises slightly to 58.8, marking the second month of sustained expansion in services activity.
Strong export orders drive growth, with the employment index hitting a record high as firms recruit aggressively to meet demand.
Manufacturing PMI falls to a three-month low due to inflation and India-Pakistan conflict pressures, contrasting with the robust services sector.

India’s services sector activity reached a three-month high in May 2025, buoyed by strong international demand, according to the latest HSBC India Services PMI® survey. The Business Activity Index for the services sector rose marginally to 58.8 in May from 58.7 in April, reflecting continued expansion as a reading above 50 signals growth.

A standout feature of the report was the surge in export orders, which recorded one of the strongest improvements in international demand since the survey began nearly two decades ago. This robust external demand played a crucial role in driving the overall growth of services activity in the country.

Alongside increased sales, the sector witnessed a record rise in employment, with many service providers ramping up hiring to keep pace with growing workloads. Pranjul Bhandari, Chief India Economist at HSBC, highlighted that the employment index reached its highest level ever recorded by this survey, underscoring aggressive recruitment efforts across service firms.

However, the growth came amid intensifying price pressures, as both input costs and prices charged to customers continued to rise during the month, reflecting ongoing inflationary challenges.

In contrast, the manufacturing PMI for May declined to a three-month low, impacted by cost inflation and geopolitical tensions arising from the India-Pakistan conflict. This divergence underscores the resilience of the services sector even as manufacturing faces headwinds.

The data points to a mixed economic landscape for India, with services leading growth while manufacturing confronts external and inflationary challenges, highlighting the need for continued focus on export markets and cost managemen

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Strong export demand pushes India’s services PMI to three-month high of 58.8 in May

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