India's services sector activity expanded at the fastest pace in two years in June driven by further growth of new work, a closely watched survey has found.
Markit Economics said the HSBC services purchasing managers' index surged to a seasonally adjusted 64.0 in June from 58.2 in May. A reading above 50 indicates expansion while one below suggests contraction.
New work received by Indian service providers rose in June, and at an accelerated pace. Respondents attributed the increase to a good economic climate and strong reputations for quality,
Reflecting the greater inflow of new work, employment levels in the services sector were raised for the 15th straight month and at the fastest rate since August 2008.
Input prices faced by service providers slowed further from April's 20-month high in June. Nonetheless, the latest increase was marked, driven by both raw material price and wage rises. Output charges were also raised, as service providers attempted to boost their profit margins.
Frederic Neumann, co-head of Asian economics research at HSBC, said: "India's services sector is driving at full speed. Despite a pull-back in manufacturing, firms in the tertiary sector are still receiving new business at a brisk pace and are boosting employment. As a result, price pressures remain elevated.
"India's economy, it appears, is shaking off weakness elsewhere, requiring an entirely different policy conduct than other countries in Asia."
Meanwhile, the composite PMI, which is a weighted average of the manufacturing and services PMIs, stood at 62.8 in June. This marks the fastest expansion recorded in private sector activity in almost two years.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.