HSBC India Services PMI® June 2026
India's service economy remained in expansion territory but showed significant loss of momentum in June 2026. The seasonally adjusted HSBC India Services PMI Business Activity Index registered 57.4, down from 59.8 in May, marking the weakest upturn in 17 months though still comfortably above the neutral 50.0 mark and its long-run average, indicating historically strong expansion.
The slowdown was driven by the weakest rise in total sales since November 2023, with new order intakes expanding at the slowest pace in over two-and-a-half years. Companies cited challenging market conditions and reduced client interest for some services as factors dampening growth, though competitive pricing decisions, greater demand for ecommerce, higher customer bookings, and better local tourism supported some expansion.
A key area of strength was international demand, with new export orders rising at the fastest pace in three months. Firms reported improved demand from clients in Australia, Belgium, Canada, Germany, Malaysia, Nepal, Oman, Qatar, Singapore, the UAE, and the United States.
The employment situation reflected the broader slowdown, with hiring activity broadly stagnant as service providers found payroll numbers sufficient for current requirements. This followed solid job creation in April and May. Outstanding business volumes were broadly stable, with the index only fractionally above the 50.0 threshold.
Inflationary pressures showed significant cooling in June. Input costs rose at a moderate rate that eased to a five-month low, with panellists citing greater electricity, food, fuel, and transportation prices. Similarly, output charge inflation weakened to a slight rate that was below its long-run average and the weakest since November 2025. Consumer services topped the inflation rankings despite seeing weaker rates of increase than in May.
Business confidence faded to a five-month low and was below the historical trend. While some companies expect to benefit from equipment acquisition, marketing efforts, and new client enquiries, others listed competition, challenging economic conditions, and rupee depreciation as potential headwinds.
The HSBC India Composite PMI® Output Index fell from 59.3 in May to 57.1 in June, indicating the slowest growth since March. The private sector saw broad-based slowdown with weaker expansions in both manufacturing and service economies. Aggregate sales volumes rose at the weakest pace in three months, job creation slipped to its softest in 2026, and external orders expanded to the least extent in close to two years.
Data were collected from 10-26 June 2026 from a panel of around 400 service sector companies covering consumer (excluding retail), transport, information, communication, finance, insurance, real estate and business services, stratified by detailed sector and company workforce size based on contributions to GDP.