India’s services sector continued to expand in December 2025, but growth moderated to its weakest pace in 11 months, as softer increases in new business and output coincided with a stalling of hiring activity, showed the HSBC India Services PMI released by S&P Global on Tuesday.
The seasonally adjusted HSBC India Services PMI Business Activity Index eased to 58.0 in December from 59.8 in November, marking the slowest rate of expansion since January 2025, though the reading remained comfortably above the 50-mark that separates growth from contraction.
Growth in new business softened to an 11-month low, even as firms continued to benefit from competitive pricing, demand buoyancy and positive client interest. Survey respondents, however, cited heightened competition and the availability of cheaper alternative service providers as constraints on growth.
In contrast, new export orders expanded at a faster pace than in November, supported by stronger demand from Asia, North America, the Middle East and the UK.
Employment growth in the services sector stalled in December, bringing to an end a hiring trend that had persisted since June 2022. Around 96 per cent of firms reported no change in staffing levels, reflecting limited pressure on operating capacity.
Overall business optimism slipped to its lowest level in nearly three-and-a-half years, amid concerns over market uncertainty and exchange rate movements.
Input costs and output charges rose at a quicker pace than in November, although inflation remained below long-run averages. Fewer than 3 per cent of companies raised their prices, with the majority opting to keep fees unchanged.
“While India’s service sector continued to perform well in December, the retreat in several survey indicators as 2025 ended may suggest a moderation in growth heading into the new year,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
She added that a benign inflation environment could support competitiveness and job creation, even as services exports strengthened despite slower domestic growth.
