India's service sector strengthened due to increase in new business and exports, PMI rose from 60.2 to 60.5

The country's service sector's growth rate increased in June, after reaching a five-month low in May, thanks to extraordinary growth in overseas sales and robust new orders. The HSBC India Services Business Activity Index increased from 60.2 in May to 60.5 in June. According to the Purchasing Managers Index (PMI), a score above 50 indicates expansion and a score below 50 implies recession.

Pranjul Bhandari, Chief India Economist, HSBC, said, "Activity growth in India's services sector accelerated in June, with the index rising 0.3 ppt (percentage points) to 60.5, driven by growth in both domestic and international new orders. This encouraged service sector firms to increase their staffing levels at the fastest pace since August 2022.

The strength of demand and new business drove growth. New orders to Indian service providers continued to rise in June, extending the current streak of expansion to nearly three years. International orders also expanded to a record high. The Indian services sector received work from across Asia, Australia, Europe, Latin America, the Middle East, and the US.