October PMI Data Shows Sluggish Momentum in India’s Services Sector

India’s service sector is one of the predominant sectors in the country, and the very same sector has been witnessing a slowdown for the past few months. In October, this sector slowed down to an even five-month low, mainly affected by unfavorable weather conditions. Also, excessive competition has hindered India’s service growth momentum of the past few months. 

PMI Index Indication

The HSBC India Services PMI, which is compiled by S&P Global, dropped to 58.9 in October 2025, from September’s 60.9, indicating the slowdown in the service sector. This has been the slowest month since May; however, the index remained over the 50-mark, and this is the 51^st month of continuous growth with no contraction in between. While there might be a short-term slowdown in October, the overall demand has been resilient so far, pushing the index upward. 

The index report suggests that the slowdown in the service sector has been a result of multiple floods, landslides, and other weather-led disasters. The weather conditions were too poor and uncertain during October, which hindered business growth. These poor weather conditions, coupled with fierce competition in the market, restricted businesses from growing efficiently. 

Global Demand Slowdown

The global demand slowed down to a 7-month low, hindering the export businesses, and this further slowed the growth of the service sector. 

The business confidence was also down to a 3-month low, and the hiring activities stayed muted. The job creation hit an 18-month low as well during October. 

Some Sigh of Relief

While the overall growth slowed down during October in India’s services sector, there has been some relief, mainly coming from the price front. The input cost grew at the slowest pace since August 2024, mainly driven by reductions in the GST. This in turn let the businesses increase their output prices at a 7-month slowest pace as the inflationary pressure also drops. 

Rate Cut Expectations 

As per experts, this slowdown in the Indian services sector growth and the slower growth in price increase can lead to policy rate cuts by the RBI. This is also anticipated due to the retail inflation being down to an 8-year low of 1.54% in September. 

Overall Economic Scenario

On the other hand, the HSBC India Composite PMI, which takes into account both manufacturing and services, also dipped to 60.4 in October from 61 in September, and this is also a 5-month low. However, the manufacturing sector grew and orders came in at a robust pace, which didn’t let the overall index drop drastically. 

Wrapping up 

Slowdown in India’s services sector is not that common in India, as it is one of the dominant sectors, but the global slowdown has been taking a toll on the business growth for some time now, and in October, it got coupled with unfavorable weather conditions, leading to more sluggish growth. 

Source: CNBC TV18

Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.