India’s services activity slowed sharply in June, falling to a 17-month low of 57.4, down from 59.8 in May, according to the latest HSBC PMI data analysed by Moneycontrol.
The June reading marks the weakest expansion in the services sector since January 2025, when the index stood at 56.5. While a reading above 50 still signals expansion, the decline indicates a clear moderation in growth momentum in one of the key pillars of India’s economy.
The slowdown in services was steeper than in manufacturing. India’s manufacturing PMI eased to a three-month low of 54.2 in June, from 55.0 in May, suggesting that both major sectors lost momentum during the month. However, services saw a sharper deterioration, with the month-on-month decline of 2.4 points far exceeding manufacturing’s 0.8-point drop.
Services activity had remained relatively resilient through much of the past year, even touching 62.9 in August 2025. Since then, momentum has gradually cooled, with readings largely trending lower through 2026 despite intermittent rebounds.
The latest print also marks a reversal from May’s strong performance, when services activity rose to 59.8, raising hopes of renewed momentum. Instead, June’s sharp pullback suggests demand conditions weakened more than expected.
The divergence between services and manufacturing also narrowed in June.
Key Questions AnsweredWhat caused India's service activity to slow down?India's service activity slowed in June due to a slowdown in demand which weighed on output and hiring. The HSBC Flash India Services PMI Business Activity Index eased to 57.3 in June from 59.8 in May, marking its lowest reading in 17 months.How will this slowdown impact India's economy?India's private sector activity slowed to a three-month low in June, with the services sector experiencing its sharpest slowdown in 17 months.Could this trend affect future job growth?Yes, a slowdown in private sector activity, particularly in services, and weakened hiring momentum could affect future job growth. The services PMI hit a 17-month low in June, and employment growth was the weakest in six months.
Discover the latestBusiness News,Sensex, andNiftyupdates. ObtainPersonal Financeinsights, tax queries, and expert opinions onMoneycontrolor download theMoneycontrol Appto stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.