New Delhi: India’s services sector recorded a modest rise in activity in January, showing that demand improved after a slowdown at the end of last year, according to a private survey released on Tuesday.
The HSBC Services Purchasing Managers’ Index rose to 58.5 in January from 58.0 in December. A reading above 50 indicates expansion. This marks more than four years of continuous growth in the sector, which forms the backbone of the Indian economy.
The survey showed that new business increased at a faster pace, supported by better marketing, digital services and steady domestic demand. Export orders also improved, helped by stronger demand from countries such as Indonesia, Qatar, Sri Lanka and Vietnam.
Business confidence climbed to a three month high as firms expect better efficiency and stable demand in the coming months. However, hiring remained weak. Companies continued to rely on existing staff instead of adding new workers, suggesting caution about long term costs.
Input prices rose at the fastest pace since September, driven by higher wages and operating expenses. As a result, many firms passed on these costs to customers by raising service charges.
The services rebound comes as India’s manufacturing sector also shows steady but moderate growth. Together, the data suggest that private sector activity improved at the start of 2026 after slowing in December.
Economists say the stronger services performance supports India’s growth outlook, but rising costs and weak job creation remain key concerns. The Reserve Bank of India is expected to keep interest rates unchanged for now as it balances growth needs with inflation risks.
Overall, the latest data indicate that India’s economy has begun the year on a firmer footing, led by the services sector, even as challenges persist in employment and price pressures.