According to a monthly poll released on Wednesday, India’s services sector grew to a two-month high of 58.5 in January due to stronger growth in new business intake and production, which prompted service firms to hire more employees.
HSBC India Services PMI January 2026
Due mostly to demand buoyancy, new business wins, and tech investment, the seasonally adjusted HSBC India Services PMI Business Activity Index increased from December’s recent low of 58.0 to a two-month high of 58.5 in January.
“India’s services PMI increased to 58.5 in January, up from 58.0 in December, indicating ongoing momentum in the sector.” According to the Purchasing Managers’ Index (PMI), a print above 50 indicates expansion, while a score below 50 indicates contraction. According to Pranjul Bhandari, Chief India Economist at HSBC, “a consistent flow of new orders, particularly rising overseas demand from South and Southeast Asia, drove robust output growth.”
Growth in New Business and Output
India’s service providers observed a quicker increase in both new business and output. According to the poll, they also employed more employees and had a more optimistic perspective.
New orders increased at the fastest rate in two months, according to the poll. International orders increased steadily, although the local market was the primary source of new business gains.
International Orders and Business Outlook
Participants in the survey commented on new business gains from customers in Vietnam, Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, and Thailand. Indian service providers were more optimistic about the future. “Efficiency improvements, successful marketing, and the acquisition of new clientele helped business confidence soar to a three-month high.” Even while input and output costs are increasing, they are still quite low by historical standards, Bhandari continued.
According to the poll, input expenses and selling charges increased more quickly, but they were still modest.
Cost Pressures by Sector
The Consumer Services category experienced the most severe cost constraints, while the Finance & Insurance industry saw the largest increase in output prices. In the meantime, India’s private sector had faster growth in output and new orders in January, which bolstered company confidence and helped create jobs.
Composite PMI and Private Sector Employment
From its 11-month low of 57.8 in December of last year, the HSBC India Composite PMI Output Index increased to 58.4 in January. Weighted averages of similar manufacturing and services PMI indices make up composite PMI indexes. According to official GDP figures, weights represent the relative sizes of the manufacturing and service sectors. “The composite PMI also rose in January, suggesting healthy demand growth across both manufacturing and services,” stated Bhandari.
In terms of employment, private sector employment rose at the beginning of 2026 after stagnating in December. According to the poll, manufacturing companies and their service counterparts had modest rates of job creation.
📈 Services Sector Growth Highlights
- PMI January 2026: 58.5 (Two-month high)
- New Orders: Fastest growth in two months
- Employment: Private sector hiring increased
- International Demand: Vietnam, Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand
- Cost Pressures: Moderate, highest in Consumer Services
- Business Confidence: Three-month high
👥 Employment & Future Outlook
- Private Sector Employment: Increased after December stagnation
- Job Creation: Modest in manufacturing & services
- Business Confidence Drivers: Efficiency, marketing, new clients
- Overall Outlook: Positive with healthy demand growth
Frequently Asked Questions
1. What was the January 2026 Services PMI for India?
In January, India’s services sector PMI reached a two-month high of 58.5, indicating strong growth.
2. What is causing the services sector to grow?
Strong domestic demand, international orders from nations like Indonesia, Malaysia, and Thailand, faster growth in new business intake and output, and increasing tech investments were the key drivers of the boom.
3. What is the state of employment in the services industry?
In response to growing demand, service providers hired more employees. Employment in the private sector climbed somewhat in January after stagnating in December.
4. How about costs and prices?
Selling prices and input costs both slightly increased. The Finance & Insurance industry experienced the biggest increase in output charges, while the Consumer Services sector experienced the greatest cost constraints.
5. How does this affect the confidence of businesses?
Efficiency improvements, successful marketing, gaining new customers, and a steady increase in both domestic and foreign orders all contributed to the three-month high in business confidence.
Conclusion
In January 2026, India’s services industry demonstrated significant growth in new business, increased output, and job gains. High business confidence and moderate cost pressures point to a robust and growing private sector that supports overall economic expansion.
Additionally, the composite PMI improved, indicating strong activity in the manufacturing and services sectors.
Disclaimer
This content is for informational purposes only and does not constitute financial or investment advice. Readers should do their own research before making any decisions.
