Services Sector

India’s services sector growth eased in October, with the Purchasing Managers’ Index (PMI) falling to a five-month low, signaling softer demand conditions and a slowdown in new business inflows. While activity remained in expansionary territory, the moderation hints at weakening momentum in the post-monsoon period. Despite the dip, the sector continued to benefit from robust domestic consumption and resilient employment trends.

A recent NITI Aayog report highlights the growing dominance of India’s services sector as a major driver of employment and economic expansion. The study reveals that the sector contributes significantly to GDP growth and job creation, particularly in areas such as information technology, finance, healthcare, logistics, and tourism.

India’s services sector exhibited slower growth in September, as reflected in the latest Purchasing Managers’ Index (PMI) report. The moderation signals a cooling of activity in key service industries, including hospitality, finance, and IT services, amid rising input costs and cautious client spending. While the sector continues to expand, the pace has softened compared to previous months, indicating headwinds that could impact broader economic momentum.

India’s services sector surged to its fastest pace of growth in 15 years this August, underscoring the resilience of Asia’s third-largest economy amid global headwinds. The expansion, reflected in a marked rise in new business orders and robust demand across industries, reinforces the services sector’s role as the primary driver of India’s GDP. Analysts believe this momentum will bolster employment, strengthen fiscal revenues, and enhance investor confidence.