Strong export orders drive May services PMI to three-month high of 58.8

India's services sector activity rises in May 2025, driven by strong exports, record employment, and price pressures.

India’s services sector activity rose marginally to a three-month high in May 2025, driven by strong exports, according to a private sector survey.

The HSBC India Services PMI® Business Activity Index for May came in at 58.8, up from 58.7 in April. The reading for May marks the second consecutive month of increased activity. A reading above 50 denotes an expansion in activity, while one below 50 implies a contraction.

Also read | India-Pakistan conflict, inflation drag May PMI to three-month low of 57.6

“A key area of strength was exports, with survey participants reporting one of the strongest improvements in international demand in 19-and-a-half years of data collection,” the report said. 

The report further said that May’s survey also revealed a record increase in employment, as services firms continued to adjust their operating capacities in line with ongoing increases in sales.

“To keep up with swelling demand, India’s service providers heavily increased staff recruitment,” Pranjul Bhandari, Chief India Economist at HSBC said. “Indeed, the employment index rose to the highest reading ever recorded by this survey. Meanwhile, price pressures continued to intensify with input prices and charged prices both rising last month.”

The uptick in services activity comes at a time when the May PMI for manufacturing fell to a three-month low, dragged down by the India-Pakistan conflict and cost inflation.