India's Services PMI Remains Strong, But There's One Warning Sign In The June Data

India Services PMI June 2026: Even as overseas orders strengthened and inflationary pressures eased, businesses reported more challenging market conditions at home.

India Services PMI June 2026: Although overall business confidence moderated during the month, firms continued to express optimism about the outlook.

Source : Freepik

Show Quick Read

Key points generated by AI, verified by newsroom

• Indian services expanded in June, growth slowed due to demand.
• Strong export orders boosted growth, offsetting domestic demand slowdown.
• Inflationary pressures eased; businesses remained optimistic about future outlook.

India Services PMI June 2026: India's services sector extended its expansion in June, although the pace of growth eased as softer domestic demand weighed on business activity, according to the latest HSBC India Services PMI released on Friday.

The seasonally adjusted Services Purchasing Managers' Index (PMI) stood at 57.4 in June, remaining comfortably above the neutral 50 mark that separates expansion from contraction. While the reading signalled continued growth, it also reflected a moderation from previous months as companies reported more challenging market conditions.

Domestic Demand Loses Some Momentum

According to the HSBC India Services PMI data, business activity continued to benefit from competitive pricing strategies, rising e-commerce demand, stronger customer bookings and improved local tourism.

However, the report also showed that growth in new business slowed to its weakest pace in more than two-and-a-half years. Survey participants attributed the moderation to softer domestic demand, weaker client interest and increasingly challenging market conditions.

Commenting on the data, Pranjul Bhandari, Chief India Economist at HSBC, said the services sector remained firmly in expansion territory despite the slowdown.

"India's services PMI remained in expansionary territory but eased to 57.4 in June. The loss of momentum points to more challenging market conditions and weaker demand, particularly at home. Even so, external demand held up well as overseas sales stayed robust and growth reached a three-month high," Bhandari said.

Export Demand Continues To Support Growth

While domestic demand moderated, overseas markets continued to provide support for service providers.

The PMI survey showed that new export orders grew at their fastest pace in three months, driven by stronger demand from Australia, Canada, Germany, the UAE and the United States.

The improvement in international business helped offset some of the weakness seen in the domestic market.

Hiring Activity Remains Stable

Employment trends were broadly unchanged during June, with companies indicating that staffing levels remained adequate after recruitment activity picked up in April and May.

The survey suggested that businesses largely maintained their workforce as they balanced softer demand with expectations of continued growth over the coming year.

Business Confidence Holds Up

Although overall business confidence moderated during the month, firms continued to express optimism about the outlook.

According to the HSBC survey, companies expect business activity to remain supported by fresh client enquiries, ongoing marketing initiatives and continued investments in technology.

Inflationary Pressures Ease Further

The survey also pointed to an easing in cost pressures.

Input cost inflation slowed to a five-month low during June, while output price inflation eased to its weakest level since November 2025, indicating some moderation in pricing pressures across the services sector.

The broader private sector also remained on a growth path during the month.

The HSBC India Composite PMI Output Index, which combines manufacturing and services activity, stood at 57.1 in June, signalling continued expansion across both sectors, according to the HSBC PMI data.