India's service sector expanded at its slowest pace in nearly a year last month as growth in new business eased and hiring stalled.
The HSBC India Services Purchasing Managers' Index (PMI), compiled by S&P Global, dropped to 58.0 in December 2025 from 59.8 in November, as against an estimated 59.1. A reading above 50.0 indicates growth in activity, while below that level points to a contraction.
“While India's service sector continued to perform well in December, the retreat in several survey indicators as 2025 ended may suggest a moderation in growth heading into the new year,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.
New business growth—a key gauge for demand—eased to its slowest pace since January 2025. While firms continued to see buoyancy in demand and client interest, growth was moderated by competition from alternative providers offering cheaper services.
India Services PMI in December 2025: Key indicators
- The employment trend worsened as the 42-month hiring streak came to an end in December 2025, with firms marginally reducing staffing levels. Nearly all firms surveyed (96%) kept workforce levels unchanged.
- Business confidence regarding future activity declined for the third straight month, reaching its lowest point in more than three years.
- International demand provided a bright spot with new export orders accelerating from November's eight-month low.
- Input costs rose moderately in December 2025, faster than in November but remaining below the long-term trend.
- Output price inflation remained weak with fewer than 3% of surveyed firms raising their fees in December 2025.
“What bodes well for the outlook is the benign inflation environment,” De Lima said. “If services firms continue to see only mild increases in their expenses, they should be better positioned to compete and limit price hikes, thereby boosting sales and creating more jobs.”
{{/usCountry}}“What bodes well for the outlook is the benign inflation environment,” De Lima said. “If services firms continue to see only mild increases in their expenses, they should be better positioned to compete and limit price hikes, thereby boosting sales and creating more jobs.”
{{/usCountry}}HSBC's India Composite PMI, including manufacturing activity which slowed to its weakest pace in two years, fell to 57.8 in December from 59.7 in November, marking an 11-month low.