Wed Mar 05 06:18:08 UTC 2025: ## India’s Services Sector Surges in February, Driven by Strong Domestic and Global Demand

**New Delhi, March 5, 2025** – India’s services sector experienced a significant boom in February, fueled by robust domestic and international demand, according to a new survey released Wednesday. The HSBC India Services PMI Business Activity Index soared to 59.0, a sharp increase from January’s 26-month low of 56.5. A reading above 50 indicates expansion.

The surge in activity is attributed to several factors, including productivity gains, favorable demand, and a significant increase in new business, particularly from international clients in Africa, Asia, Europe, the Americas, and the Middle East. This growth in global orders was the fastest in six months, according to the export business index.

This growth led to a substantial increase in employment, with Indian service firms actively recruiting to meet rising demand and alleviate capacity pressures. The survey noted that job creation reached one of the fastest rates since data collection began in 2005. While business sentiment remains positive, it did dip slightly last month to its lowest point since August 2024.

Pranjul Bhandari, Chief India Economist at HSBC, highlighted the role of global demand in driving the sector’s growth. Positive projections for the year ahead are underpinned by advertising success, improved customer relations, efficiency gains, and the strong demand environment. Around 25% of survey respondents forecast growth in the coming year.

The positive trend in the services sector also boosted the overall HSBC India Composite Output Index, which rose from 57.7 to 58.8, indicating substantial expansion across both manufacturing and services sectors. Cost pressures, meanwhile, eased to their lowest level since October 2024.

The survey, compiled by S&P Global, is based on responses from approximately 400 service sector companies. While the strong February performance is encouraging, it follows India’s December quarter GDP growth of 6.2%, a recovery from previous lows but still below last year’s figures. The government currently projects 6.5% GDP growth for the full 2024-25 fiscal year. Despite this, India is expected to remain the fastest-growing major economy.

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