India’s Services Activity Eases to Five‑Month Low in October, Signalling Softening Momentum in the Economy

India’s Services Activity Eases: India’s dominant services sector saw its pace of growth ease in October, slipping to a five‑month low, according to the latest survey data from HSBC and S&P Global. While the sector continues to expand, the moderation underlines emerging headwinds for the country’s economy at a time when manufacturing is gaining strength.

Key Findings from the Data

• The HSBC India Services Purchasing Managers’ Index (PMI) fell to 58.9 in October from 60.9 in September.
  
• This is the slowest pace of expansion since May 2025, though it remains comfortably above the 50‑mark that separates expansion from contraction.
  
• New business and demand rose, but at a weaker rate — the new business sub‑index hit a five‑month low.
  
• External demand (exports of services) weakened, registering its slowest growth in about seven months.
  
• Cost pressures eased: input cost inflation rose at the slowest rate in 14 months, and selling price increases were the softest in seven months.
  
• The composite PMI (services + manufacturing) also declined to 60.4 in October from 61.0 in September, reflecting the drag from services.
  

What’s Causing the Deceleration?

• Heavy rainfall and weather disruptions in parts of the country disrupted business activity, especially in services linked to transport, logistics and tourism.
  
• Rising competitive pressures meant tighter margins and slower surge in new orders. Firms cited increased competition domestically and globally.
  
• Softer export demand for Indian services slowed global business for Indian firms, contributing to the slower new‑business growth.
  

Why It Matters

• The services sector accounts for more than half of India’s GDP; changes here have broad implications for economic growth.
  
• A slower pace in services signals that the “engine” of India’s growth may be losing a bit of steam, even if still positive.
  
• The easing of cost pressures is promising for inflation and monetary policy—including potential for interest‑rate action by the Reserve Bank of India.
  
• The contrasting strength in manufacturing (which improved in October) highlights a possible shift in growth dynamics and the need to balance growth across sectors.
  

Outlook & What to Watch

• Will the slowdown in services translate into broader softening in consumer spending, hiring or investment?
  
• Monitoring the next few months’ PMI data will show whether this deceleration is a temporary blip or a deeper trend.
  
• The RBI and policymakers may keep an eye on these signals when evaluating growth forecasts and policy settings.
  
• While cost pressures have eased, any resurgence in inflation or external shocks (weather, global demand) could reverse the positive trend.
  

Balance in Growth and Inner Stability

According to the teachings of Sant Rampal Ji Maharaj, true growth is not merely about external expansion, but about inner stability and righteous conduct. The Indian economy’s services sector may be showing signs of deceleration, but Maharaj Ji’s guidance reminds us that sustainable advancement arises when material progress is anchored in spiritual values.

“When outer hustle is not matched with inner calm, even growth becomes fragile.”

Thus, while India advances economically, it is equally important to ensure balance, ethics and purpose in our growth path.

Also Read: India’s Private Sector Growth Slows to Five‑Month Low in October

Call to Action: For Stakeholders

For Business Leaders

• Diversify service‑sector portfolios to hedge against weather and demand shocks.
  
• Invest in resilience (digital, remote service capability) to withstand disruptions.
  

For Policymakers

• Continue enabling reforms to strengthen the services ecosystem (skills, infrastructure, global integration).
  
• Monitor sectoral trends closely and be prepared to support sectors showing early signs of fatigue.
  

For Consumers & Individuals

• Be aware of how macro trends can affect services you use (travel, hospitality, trade‑services).
  
• Long‑term career planning may consider shifts if services growth moderates.
  

FAQs: India’s Services Activity Eases