India Services Sector Growth Hits 10-Month High as Demand Surges
Vizzve Finance | July 3, 2025
India's services sector recorded its fastest growth in 10 months in June 2025, according to the latest S&P Global India Services Purchasing Managers’ Index (PMI). The index surged to 60.5, up from 60.2 in May, reflecting strong expansion in new business and heightened demand across various sub-sectors.
Key Highlights:
PMI for Services rose to 60.5, the highest since August 2024.
Growth driven by robust domestic demand and improved client confidence.
New business increased at the fastest rate in four months.
Employment and input cost inflation remained moderate.
Resilient Domestic Demand Propels Services
The report indicates that strong demand from domestic consumers has continued to sustain business momentum in sectors such as IT, finance, travel & tourism, and retail services. While international demand remained softer, the domestic pipeline remained healthy.
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, stated, “India’s services economy remained in expansion territory, reflecting strong demand conditions and sustained job creation.”
Composite PMI Also Rises
The S&P Global India Composite PMI, which combines manufacturing and services data, climbed to 60.9 in June from 60.5 in May, indicating consistent overall private sector expansion.
Implications for the Indian Economy
With the services sector contributing over 50% to India’s GDP, the latest PMI reading signals positive momentum for Q2 FY2025. This may also influence RBI’s policy direction, especially amid ongoing concerns around inflation and global uncertainties.
FAQ
What is PMI and why is it important?
The Purchasing Managers’ Index (PMI) is a leading economic indicator that reflects the performance of a sector based on surveys of business purchasing managers. A reading above 50 indicates expansion, while below 50 suggests contraction.
What caused the June 2025 services PMI surge?
The uptick was largely due to stronger domestic demand, improved business confidence, and a rise in new client orders, especially in sectors like finance, travel, and IT services.
What does this mean for the Indian economy?
It signals sustained economic resilience in India’s key growth-driving services sector, potentially aiding GDP expansion and supporting employment in Q2 FY2025.
How does this impact RBI's monetary policy outlook?
If the services sector continues to expand alongside controlled inflation, RBI may adopt a cautious pause stance, allowing growth to stabilize while monitoring global risks.
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Published on :July 3,2025
Published by : Selvi
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