India’s services sector growth in July slowest in 53 months as demand softens. But new export orders rise.

India's service sector experienced its slowest growth in nearly 4.5 years in July, as indicated by a private survey. The HSBC India Services Purchasing Managers' Index (PMI) fell to 53.3 in July from 57.4 in June, marking the lowest reading since February 2022. This slowdown was attributed to challenging market conditions, moderate new business inflows, and order postponements, which impacted sales, output, and employment.

Despite the growth slowdown, new export orders showed improvement, with demand from clients in the UAE, the UK, and the US rising. The survey also noted that only the finance and insurance sectors recorded faster rates of expansion in output and sales, while other sectors saw slower growth. The surge in input costs, including fuel, labor, materials, technology, and transportation, contributed to higher profit margins and competitive pricing strategies among service providers.

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