India’s Services PMI Climbs to 59.8 in May, Hitting a 6-Month High Amid Strong Domestic Demand

New Delhi: With the robust domestic demand, India’s dominant services sector grew at its fastest pace in six months in May despite global orders, staying below last year’s average and business confidence slipping for a second straight month. Signalling an expansion in services activity, purchasing managers’ index (PMI) for services rose to 59.8 in May as against 58.8 of April, a private survey showed on Wednesday.

As per the survey, strengthening demand for services such as freight, digital solutions, e-commerce, entertainment and IT reportedly boosted new business growth during May. “As a result, companies lifted activity to a greater extent and continued to add to payroll numbers,” the survey said.

In the PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction. “India's services PMI signalled an expansion in business activity in May, supported by a continued rise in new business. External demand for India-provided services also grew at a faster pace, rebounding after a sharp decline in April. Input cost inflation eased, which in turn reduced pressure on selling prices,” said Pranjul Bhandari, chief India economist at HSBC.

On the prices front, the survey report also revealed that input prices across the service economy continued to increase at an above-trend pace during May. “Survey participants reported having paid more for food, fuel, gas, labour and materials compared to April,” the report said.

In terms of jobs, it further said that Indian services companies signalled a further increase in payroll numbers. “The overall rate of job creation was solid and the second-fastest in just under a year (behind April), but fewer than 7 per cent of panellists signalled greater hiring, and the vast majority indicated no change in headcounts,” it added.

On international orders, the survey also pointed out that growth of external demand remained below the 2025 average and the expansion in international orders was nevertheless solid, with firms citing gains from Australia, Canada, France, Germany, Hong Kong, Malaysia, the UAE and the UK