India Records Slowest Services Growth in 14 Months in March 2026
India's services PMI slows in March as demand weakens and inflation rises, while export orders surge amid global uncertainty and the impact of the Iran conflict.
Meta description - India’s service sector growth slowed to a 14-month low in March 2026. It gives the right sign, eases the demand, and moderates financial momentum overall.
India’s services sector lost steam for the second straight month in March. It is recording its slowest growth in over a year as demand weakened and inflationary pressures have strengthened amid the constant Iran conflict.
The HSBC India Services Purchasing Managers’ Index, collected by S&P Global, fell to 57.5 last month from 58.1 in February. However, the reading stays more than 50 marks, which divides growth from contraction. It shows the economic slowdown since January 2025.
The deceleration shows a sharp easing in fresh orders. With the new business development, it is slipping to its lowest level in 14 months. Respondents showed that uneven market conditions and constant geopolitical strains in the Middle East affect the domestic demand. It directly impacts tourism and complete business activity.
Export Engine Revs Up
Instead of the domestic deceleration, India’s service providers face a rush in worldwide appetite. New export orders grew at their fastest pace since mid-2024, motivated by strong demand across Europe, Asia, and the Americas.
HSBC Chief India Economist Pranjul Bhandari said in a statement, “Demand remained resilient, led by new export orders”. The service providers are demanding for the future activity stay positive.
The divergence in the middle of the cooling domestic sales and heating foreign demand implies that India’s services engine is gradually leaning on worldwide markets to offset local fatigue.
A primary concern for Services PMI will be the sharp spike in operating costs. Input cost inflation sped up to its quickest pace in about four years. It is driven by a broad rally in the costs of fuel, electricity, and necessary food items like vegetables, meat, and cooking oil.
