India Services PMI Climbs To 59.8 In May As Demand For IT, E-Commerce, And Freight Surges

India’s services sector gathered pace in May supported by strong demand for IT services, e-commerce, digital solutions, freight and entertainment.

The uptick in business activity was accompanied by solid hiring, improving export orders and easing cost pressures, signalling continued resilience in the country’s largest economic sector.

Source : Freepik

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Key points generated by AI, verified by newsroom

• India's services PMI rose in May driven by increased demand.
• Companies expanded operations and added staff amid stronger new business.
• Cost pressures eased, leading to a moderate rise in selling prices.

India’s services PMI rose to 59.8 in May, from 58.8 in April, amid strengthening demand for freight, digital solutions, e-commerce, entertainment and IT, which boosted new business growth, the HSBC India Services PMI data showed on Wednesday.

As a result, companies lifted activity to a greater extent and continued to add to payroll numbers.

Although cost pressures remained historically high across India's service economy, they receded to their lowest in four months, which supported a moderate increase in selling prices that was the softest since January, showed the PMI data.

"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,” explained Pranjul Bhandari, Chief India Economist at HSBC.

New orders placed with Indian service providers rose to the greatest degree in six months halfway through the first fiscal quarter, moving further away from the slowdown seen in March.

New export business also rose, albeit it did so to a lesser extent than total sales and that seen on average during the 2025 calendar year. 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, the PMI data showed.

Demand for Indian services improved despite another increase in selling prices. The rate of charge inflation eased to a four-month low, however, and broadly matched its long-run average, it added.

The 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.

(Disclaimer: This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)