India’s services sector growth hit an 11-month high in July, supported by strong export demand and steady domestic sales, according to the HSBC India Services PMI compiled by S&P Global. The index rose to 60.5 in July from 60.4 in June, marking four years of continuous expansion.

Export orders saw their second-strongest rise in a year, while overall new business remained solid, driven by advertising and new client gains. Finance and insurance led growth in both new orders and activity, while real estate and business services lagged.

Hiring slowed to a 15-month low despite strong demand. Price pressures increased due to higher food, freight, and labour costs, leading firms to raise service charges slightly above input cost inflation.

The Reserve Bank of India is expected to hold its repo rate at 5.50% during its meeting from 4th to 6th August, though a rate cut is likely next quarter.

Business confidence strengthened as firms invested in marketing efforts, technological innovation, and expanding their online reach. The Composite PMI, encompassing manufacturing, increased to 61.1 in July, its highest level since April 2024.

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