Service sector progress hit 15-year excessive in August, however inflation intensifies, PMI exhibits

India’s providers sector progress accelerated to a 15-year excessive in August on sturdy demand, which additionally pushed costs increased on the quickest charge in over a decade, a enterprise survey confirmed on Wednesday (September 3, 2025).

That comes after official information confirmed the sector grew at a much-higher-than-expected 7.8% charge final quarter. But the Trump administration’s steep 50% tariff on U.S. imports of Indian items threatens to dampen progress within the coming quarters.

HSBC’s India Services Purchasing Managers’ Index (PMI) , compiled by S&P Global, jumped to 62.9 final month from 60.5 in July, however was a lot decrease than a preliminary studying of 65.6.

Readings above 50.0 point out progress on a month-to-month foundation, whereas these beneath that degree level to a contraction.

“India’s services PMI Business Activity Index reached a fifteen-year high last month … on the back of surging new orders,” stated Pranjul Bhandari, chief India economist at HSBC.

New enterprise — a key gauge for demand — expanded on the sharpest tempo since June 2010. That was supported by strengthening worldwide demand with export orders recording their strongest rise in 14 months.

Robust demand allowed corporations to cross on rising prices to clients extra aggressively. Output worth inflation elevated to its highest degree since July 2012, whereas enter prices rose on the quickest charge in 9 months.

Intensifying worth pressures may imply total inflation, which declined to an eight-year low of 1.55% in July, has reached its trough and will begin spiking quickly.

Business confidence for the yr forward improved to a three-month excessive with companies citing deliberate promoting spending and beneficial demand forecasts. However, employment progress remained comparatively modest.

The Composite PMI, which mixes providers and manufacturing sectors, rose to a 17-year excessive of 63.2 in August from 61.1 in July, indicating broad-based financial momentum throughout each segments of the financial system.