June saw a record increase in exports, which helped India’s services sector flourish

According to a business poll, which also revealed that hiring was occurring at the highest rate in over two years, growth in India’s leading services sector picked up speed last month, driven by robust demand and a record increase in export orders.The S&P Global-compiled HSBC India Services Purchasing Managers’ Index increased to 60.5 in June from 60.2 in May, nearly matching the consensus prediction of 60.6 in a Reuters survey and the preliminary reading of 60.4.

According to Pranjul Bhandari, chief India economist at HSBC, “activity growth in India’s service sector accelerated in June… led by an increase in both domestic and international new orders.” A crucial indicator of demand, new business, has grown faster last month and has been over breakeven since August 2021. The fastest increase in foreign orders since the sub-index was included in the study over ten years ago confirmed that.This bodes well for India’s economic prospects; the Reserve Bank of India reports that India is currently the world’s seventh-largest exporter of services.According to a Reuters survey, although Asia’s third-largest economy grew by 7.8% more than anticipated in the January–March quarter, it was predicted to contract slightly this fiscal year.

Service providers were compelled to hire extra employees due to high demand. The rate of job creation reached its highest level since August 2022, extending the employment boom to more than two years. However, worries about market volatility and competition caused overall optimism for the upcoming year to drop to an 11-month low.”Overall, service providers remain confident about the year-ahead business outlook, although the level of optimism moderated sharply during the month,” Bhandari stated.