India’s services sector surged to a 10-month high in May 2025, signaling a robust rebound in business activity driven by solid demand, new orders, and improved market conditions. The services Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 61.4 in May, up from 60.8 in April, highlighting strong expansion and renewed confidence among service providers.
A reading above 50 indicates expansion, and the latest number reflects the sector’s resilience in the face of global economic uncertainties. This is the 22nd consecutive month that the services PMI has remained in expansion territory, showing consistent strength in areas like finance, real estate, technology, transport, and consumer services.
Firms reported stronger inflows of new business, both from domestic and international clients, with export orders reaching their highest since September 2014. The survey also pointed to an uptick in job creation as companies scaled up operations to meet rising demand.
Business sentiment remains high, with many companies optimistic about growth in the coming year. Factors such as policy stability, infrastructure investments, and digital transformation have added to the positive outlook.
However, rising input costs remain a challenge, particularly due to inflation in wages and raw materials. Despite this, service providers have largely managed to maintain profitability through increased volumes and operational efficiency.
With services making up more than half of India’s GDP, the sector’s continued strength bodes well for the broader economy. Analysts expect that the strong momentum in services, coupled with steady performance in manufacturing and rising investment activity, will support India’s overall growth trajectory for FY 2025–26.