The number in March went up to 61.2 last month from February’s 60.6, confounding a preliminary reading for a fall to 60.3.
According to the survey, employment in the services industry rose at the quickest pace in seven months and export business surged at a record rate.
A PMI reading above 50 means expansion, while a below-50 reading shows contraction. March was the 32-th consecutive month of expansion for the sector.
“India’s services PMI rose in March, following a small dip in February, on the back of strong demand that spurred sales and business activity,” News agency Reuters quoted Ines Lam, economist at HSBC, as saying.
The data showed March exports jumping at the fastest pace since the sub-index was included in the survey in September 2014.New business during the month was driven by strong domestic demand and favouable economic conditions, the survey showed.That in turn buoyed job sentiments as companies raised hiring to the fastest pace since August 2023.
The overall outlook for the year continued to be optimistic, the survey showed.
The March data, however, also showed the future activity sub-index had fallen to a four-month low, owing to lingering concerns over competitive pressures.
Prices in the industry also rose at the fastest rate since July 2017, as rising input costs combined with rising demand caused firms to pass on the increase to clients.
High prices could mean the Reserve Bank of India would keep its repo rate at 6.50% for a longer period.
Faster expansion in services activity, alongside a manufacturing industry growing at the fastest pace in 16 years in March, pushed the HSBC final India Composite PMI Index to an eight-month high of 61.8 from the previous month’s 60.6 and higher than a preliminary reading of 61.3.