March services PMI at 14-mth low

News Service mumbai

India’s services sector lost some growth momentum in March, expanding at its weakest pace in 14 months as geopolitical tensions in the Middle East weighed on domestic demand, even as export orders surged to near-record levels.

According to the HSBC India Services PMI, the Business Activity Index eased to 57.5 in March from 58.1 in February. While the reading remained comfortably above the long-term average of 54.4—signalling continued expansion—it pointed to a clear moderation in growth at the end of the financial year.

The slowdown was largely driven by softer domestic demand conditions. Businesses reported that the ongoing Middle East conflict impacted market sentiment, tourism flows and overall consumption patterns. As a result, new business inflows rose at their slowest pace since January 2025, with three key segments—Finance & Insurance, Real Estate & Business Services, and Transport & Communication—recording weaker growth.

However, external demand offered a strong counterbalance. New export orders expanded at one of the fastest rates on record, with firms reporting increased business from Africa, Asia, Europe, the Americas and the Middle East. This divergence highlights the growing importance of global markets in sustaining India’s services growth.