PTI New Delhi

India's services sector activity witnessed a sharp uptick in February boosted by improving domestic and international demand, which resulted in a quicker expansion in output and a substantial increase in employment, a monthly survey said on Wednesday.

The seasonally adjusted HSBC India Services PMI Business Activity Index rose from January's 26-month low of 56.5 to 59.0 in February, indicating a sharp rate of expansion. In the Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

"India's services business activity index rose to 59.0 in February 2025, up considerably from January's 26-month low of 56.5. Global demand, which grew at its fastest pace in six months according to the new export business index, played a major role in driving output growth for India's services sector,” said Pranjul Bhandari, Chief India Economist at HSBC. According to the survey, productivity gains, favourable underlying demand and greater intake of new business.

Moreover, gains in international orders supported this uptick in growth, with service providers reporting better demand from clients in Africa, Asia, Europe, the Americas and the Middle East, the survey said. In order to accommodate for rising new business and alleviate capacity pressures, Indian services firms continued to pursue recruitment drives. Employment expanded sharply, and at one of the fastest rates seen since data collection began in December 2005.