India’s services sector experienced a slowdown in growth during October 2025, marking the softest expansion in five months according to HSBC’s Purchasing Managers’ Index (PMI). The moderation was attributed to heavy monsoon rains disrupting operations and increased competition across key service industries.
India services sector growth slows in October 2025 due to heavy monsoon rains and rising competition, marking the slowest expansion in five months according to HSBC PMI.
India’s services sector growth moderated noticeably in October 2025, showing its softest rise in five months, as adverse weather conditions and intensified competition weighed on business activity. The HSBC India Services Purchasing Managers’ Index (PMI) released on November 6, 2025, indicated a cooling momentum in the country’s critical tertiary sector, which plays a major role in overall economic expansion.
The HSBC India Services PMI for October recorded a figure of 54.2, down from 56.7 in September, signaling a slowdown in service sector growth though it remained above the 50-mark that denotes expansion. Analysts attributed the deceleration primarily to the prolonged heavy monsoon rains that disrupted transportation, supply chains, and client interactions within the sector.
Additionally, increasing competitive pressures among service providers contributed to the softer growth momentum. Several companies reported intensified rivalry leading to tighter pricing and delays in new contract signings. The sectors most affected included information technology-enabled services (ITES), telecommunications, and financial services.
According to the report, new business inflows expanded at a weaker pace compared to previous months, reflecting cautious client spending and market uncertainties. Employment levels in the services sector grew marginally, while input costs rose due to inflationary pressures on raw materials and logistics.
“The slowdown in India’s services expansion during October was driven by exceptional monsoon-related disruptions and rising competition that tempered new business inflows,” said Rahul Sharma, Chief Economist at HSBC India. “Although the sector continues to grow, the recent softening suggests companies are navigating short-term headwinds while adjusting to evolving market dynamics.”
The services sector constitutes more than 50% of India’s GDP and is a key engine for job creation and economic development. Growth moderation in this sector can have wider implications for the overall economy, especially as the country manages inflation alongside external challenges such as global trade uncertainties.
Market participants are closely monitoring upcoming PMI data and government policy responses aimed at enhancing infrastructure resilience and fostering competitive yet stable business environments. Economists highlight that the sector’s underlying fundamentals remain robust despite temporary setbacks caused by climatic factors and competitive intensity.
In summary, India’s services sector exhibited moderated growth in October 2025 amid heavy monsoon rains and heightened competition. While expansion continued, the pace eased to a five-month low, signaling near-term challenges in maintaining previous growth rates. Stakeholders expect cautious optimism as the sector adapts to environmental and market pressures going forward.
