BENGALURU, July 3 - India's services industry expanded in June at its slowest clip in 17 months, as a survey showed a marked slowdown in domestic demand, weaker new-business growth and nearly stalled hiring.
The HSBC India Services Purchasing Managers' Index (PMI), compiled by S&P Global, fell to 57.4 in June from 59.8 in May. The June reading was marginally above a preliminary estimate of 57.3. Readings above 50.0 denote expansion in activity.
Demand and orders
New business, a core gauge of demand, expanded at the slowest rate since November 2023, signalling softer conditions in domestic markets. International demand offered a partial offset, with new export orders rising at their fastest pace in three months.
Employment and capacity
With overall demand easing, firms largely curtailed hiring. The survey indicated that headcount increases were minimal in June, with only about 1% of respondents reporting additional staff. That represents a clear retreat from the stronger job creation seen in April and May.
Costs and pricing
Input cost inflation moderated to a five-month low as the prices of electricity, food, fuel and transportation rose at softer rates. Firms passed on less of those higher input costs to clients, with the prices charged sub-index falling to a seven-month low.
Sentiment and broader private sector signals
Business confidence weakened to a five-month low. Respondents cited competition, difficult economic conditions and rupee depreciation as sources of concern, reflecting broader unease about global trade uncertainty and financial market volatility.
The India Composite PMI, which combines services and manufacturing, eased to its weakest level since March. Across the private sector, output, new orders and employment all expanded at softer rates, and business sentiment likewise fell to a five-month low.
Summary
June's PMI reading points to cooling momentum in India's dominant services sector, driven primarily by faltering domestic demand, much slower new-business growth, a near halt in hiring and softer inflationary pressures, all accompanied by weakening business confidence.