By Admin 
India’s Service Sector Growth Slows: Disappointing news has come from the service sector amidst the continuous efforts being made to speed up the country’s economy. While the recent GST reforms were expected to raise domestic demand and business activities, the growth rate of the service sector has slowed down in September.
According to the Service Survey of India Seva PMI released by HSBC, the business activity index (PMI) of the service sector declined to 60.9 in September 2025, compared to 62.9 in August. Although this level is above the neutral level of 50 points, it shows that the economy still continues to grow, but this growth is now slower than before.
Recession signs and lack of international demand
According to the survey, one of the main reasons for the slowdown of the service sector is the slow pace of new orders and business activities. Along with this, there has been a soft improvement in the international demand of Indian services.
In September, an increase in export orders was recorded, but it has been at the weakest level since March. Companies said that the availability of services at low prices in other countries has increased competition, which put pressure on India’s external sales.
The situation was a bit better on the price level front. The survey reported that inflation speed had been the slowest since March, and it was in line with the long -term average. In September, the prices of Indian services increased at a weak rate, which brought some relief to consumers.
Sleake in employment generation
Employment generation was also slow during September. Less than five percent of the companies involved in the survey reported new recruits. This means that employment growth in the service sector was limited and new job opportunities were reduced.
Composite output index declines
Composite Output Index of HSBC India – which includes both manufacturing and service display – remained at 61.0 in September, which came below 63.2 in August. This reflects the weakest rate of expansion since June. This index is prepared on the basis of share in the GDP (GDP) of the country’s manufacturing and service sectors.
Purchasing manners’ Index) staying above 50 means expanding in the economy, while the level below 50 reflects contraction. Although the growth rate of the service sector has slowed down a bit, it is still in the field of expansion – which indicates that the foundation of the country’s economy remains strong, even though there is pressure on the service sector in the short term.
Opinion of analysts
According to HSBC India Chief Economist Pranjul Bhandari, “The business activities of the service sector have slowed down in September after touching the record height in August. However, this sector may gain speed again in the coming months due to domestic demand and policy stability.”
Overall, this report states that India’s service sector is still flexible and developing, but increasing global competition and reduction in international demand are making challenges for this.
Also read: Tata group open IPO of 15,511 crore, know everything from listing date to price band