India’s services sector recovered some of the ground lost in March, accelerating growth in April, the first month of the new fiscal year, as new business intakes and output rose, a private survey showed on Wednesday.
The HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 58.8 in April from 57.5 in March, making return to growth after registering a 14-month low in growth in the previous month. It was the strongest rate of expansion since last November.
Indian services companies welcomed a recovery in growth of both output and new order intakes during April, S&P Global said in a statement.
Despite, monthly swings, the index has remained above the 50-point threshold separating expansion from contraction for over four years – signalling the sector’s sustained resilience despite headwinds.
In addition to increased e-commerce and greater underlying demand, firms indicated that a shift from international to domestic suppliers amid the war in West Asia particularly boosted transport activity.
“Activity and new orders strengthened, even as new export orders eased, suggesting that demand is rotating from overseas markets to domestic consumers amid the Middle East conflict,” Pranjul Bhandari, chief India economist at HSBC, said in the statement. “Input cost inflation moderated but remained elevated, while output price inflation stayed subdued, indicating that some firms are absorbing higher costs rather than passing them on.”
India’s composite PMI rose to 58.2 last month, up from 57.0 in March, pointing to renewed momentum across the manufacturing and services sectors, Bhandari said.