India's crucial services sector witnessed a moderation in its pace of expansion during December 2025, according to the latest purchasing managers' index data. The sector's growth momentum eased from the previous month, marking the slowest rate of increase seen in nearly a year.
Key PMI Data Points for December
The seasonally adjusted HSBC India Services PMI Business Activity Index registered a notable decline in December. The index fell to 58.0, down from 59.8 recorded in November 2025. This December reading points to the fourteenth consecutive month of expansion, as any figure above 50 indicates growth. However, the rate of this expansion was the most subdued since January of the same year.
Primary Driver: Softening New Business Inflows
The primary factor behind this deceleration was a softer increase in new business orders. While demand conditions remained positive overall, the expansion in new work intakes was not as robust as in previous months. This cooling in the pace of new orders directly contributed to the easing of overall business activity growth. Firms continued to report gains, but the momentum was less vigorous.
Context and Sector Outlook
The December data, released on 06 January 2026, provides a crucial snapshot of the services sector's health as the year concluded. The services PMI is a critical leading indicator for the economy, encompassing vital industries such as finance, hospitality, and transport. Despite the slowdown, the index remains firmly in expansionary territory, suggesting underlying resilience. Analysts will watch closely to see if this moderation is a temporary blip or the start of a broader cooling trend, especially in light of global economic headwinds.
The performance of the services sector is pivotal for India's economic trajectory, being a major contributor to GDP and employment. The coming months' data will be essential to gauge the sector's ability to sustain growth amid evolving domestic and international demand scenarios.
