India’s December PMI shows services growth at 11-month low as demand and hiring soften

India’s services sector expanded at its slowest pace in 11 months in December as growth in new business eased and hiring activity stalled, signalling a moderation in momentum at the end of the year, according to the latest HSBC Purchasing Managers’ Index (PMI) survey.

HSBC’s India Services PMI, compiled by S&P Global, fell to 58.0 in December from 59.8 in November, undershooting the preliminary estimate of 59.1. A reading above 50 indicates expansion, while a level below that signals contraction.
“While India’s services 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 of demand, slowed to its weakest pace since January 2025. Firms reported continued client interest, but said competition from alternative service providers offering lower prices weighed on growth.
The employment outlook weakened, with the sector’s 42-month hiring streak coming to an end as firms marginally reduced staffing levels. Nearly all companies surveyed—96 per cent—kept their workforce unchanged.

Business confidence regarding future activity fell for the third consecutive month, slipping to its lowest level in more than three years. However, external demand provided some support, with new export orders picking up from November’s eight-month low.

At the broader level, the HSBC India Composite PMI fell to 57.8 in December from 59.7 in November, marking an 11-month low and missing market expectations. Manufacturing activity also slowed, with the PMI easing to 55.0, its weakest reading in nearly two years, though it remained well above the expansion threshold.

On the price front, input costs rose moderately in December, faster than in November but still below the long-term average. Output price inflation remained muted, with fewer than 3 per cent of firms raising their fees.

The PMI data suggest that while India’s private sector continues to expand, growth momentum softened across both services and manufacturing as the year came to a close.