India services PMI final 55.8 in October; input costs rise slowest since 2020

India's services sector grew at its fastest pace in four months in October 2026, according to the final HSBC India Services Purchasing Managers' Index (PMI) released on Wednesday, 4 November 2026. The index rose to 55.8 from 55.2 in September, driven mainly by demand at home. Prices that service companies pay for their inputs rose at the slowest rate in more than six years, the lowest since August 2020. But new export orders grew at the weakest pace since February 2023, and hiring almost stalled. The HSBC India Composite PMI Output Index, which combines services and manufacturing, rose to 56.2 from 55.9.

A PMI is based on a monthly survey of purchasing managers at private companies, asking whether activity, orders, prices and staffing went up or down. A reading above 50 means growth and below 50 means contraction, so 55.8 shows the services sector, which includes banking, IT, transport, hotels, retail and other businesses, is still growing at a healthy pace.

The cost picture is the most useful part for households and businesses. When the cost of inputs, such as fuel, rent, wages and supplies, rises slowly, companies are under less pressure to raise their own prices. That helps keep inflation in check and gives the Reserve Bank of India more room in its decisions on interest rates. Input costs rising at their slowest since August 2020 is a notable easing.

The weak spots are exports and jobs. Indian service exports, such as software and business services sold abroad, have been one of the economy's strengths. Export orders growing at the slowest pace in more than three and a half years suggests foreign clients are holding back, which matters for IT companies and their employees. Hiring that has almost stalled means the sector's growth is not, for now, turning into many new jobs, even as activity picks up.

The gap between the flash and final readings is also worth noting. Flash PMIs are based on most, but not all, survey responses and are released earlier in the month. The final composite figure of 56.2 is half a point below the flash estimate of 56.7, a reminder that early readings can be revised.

Peepals calculation: the services index rose 0.6 points in a month (55.8 minus 55.2), while the composite index rose 0.3 points (56.2 minus 55.9). The final composite came in 0.5 points below the flash estimate (56.7 minus 56.2). Our calculation from the reported figures.

Short-term: Slower input cost growth eases price pressure for service businesses and their customers, while weak export orders are a warning sign for IT and business services firms.

Long-term: If costs stay subdued, it supports a calmer inflation outlook. If foreign demand stays weak and hiring does not recover, growth in services may rely more on domestic spending.

Who is affected: Service companies and their workers, especially in export-oriented IT and business services; job seekers in the services sector; and households, through prices.

What to watch next: India's consumer price inflation data for October and the Reserve Bank of India's next policy decision.

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