India's Services Sector Growth Slowest in 5 Months in October; Composite PMI at 60.4

New Delhi, 6 November 2025: According to the latest HSBC India Services PMI survey, growth in India’s services sector slowed to a five-month low in October. The slowdown was attributed to intense competition and heavy rainfall across several regions, which disrupted production.

The seasonally adjusted HSBC India Services PMI Business Activity Index fell slightly to 58.9 in October from 60.9 in September, marking the slowest pace of expansion since May 2025. However, the figure remained well above the 50-point threshold that separates growth from contraction and exceeded the long-term average of 54.3. This indicates that, despite the slowdown, the services sector continued to expand robustly.

Competitive Pressures and Weather Disruptions

Survey respondents most frequently cited intense competition and adverse weather as key reasons for the slower growth. Despite this, demand remained strong, and GST-related relief continued to support operations. However, a pricing war was underway, and production in some major service sectors was constrained due to disruptions caused by heavy rainfall.

Inflation Comes Down as Price Growth Slows

Both input cost and output price inflation eased substantially, with the respective growth rates hitting 14- and 7-month lows. The report noted that the combination of GST reforms and good supply conditions was the principal factor leading to the easing of price pressures. Thus giving businesses a better and more stable environment for their costs.

External Demand and Employment Trends

Demand for Indian services from overseas was still on the rise; however, the rate of increase was the lowest since March. In any case, companies, in order to fulfill new orders and ensure the timely delivery of goods, decided to expand their workforce. Thus reflecting their optimistic view of the domestic demand.

Business Confidence and Future Outlook

Business confidence was maintained at a very high level, even though the growth had slowed down. The majority of businesses surveyed declared that they were positive about increasing their production in the following 12 months, which, in their opinion, would be mainly enabled by activities directed towards acquiring new customers and enhancing operational stability.

Composite PMI Indicates Broad-Based Slowdown

The HSBC India Composite PMI Output Index, which tracks activities in services and manufacturing, dropped from 61 in September to 60.4 in October, and this decline was largely caused by the services sector slowdown. Economists explained that although the growth is still strong, the moderation they talk about is a sign of demand returning to normal and that the increased competition is making the pace of expansion witnessed in recent months ‍‌‍‍‌‍‌‍‍‌‍‌‍‍‌‍‌‍‍‌slow.

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