India's services sector expands at fastest pace in four months

India's services sector expanded at its strongest pace in four months during October, with the purchasing managers' index rising to 55.8 from 55.2 in the previous month, according to latest data.

The uptick in activity reflects a pickup in new business orders across the services economy, suggesting renewed demand momentum as the festival season approached. Companies reported healthier client inquiries and improved revenue generation, signalling growing confidence among service providers about economic conditions.

Input cost inflation eased during the month, offering some relief to businesses grappling with margin pressures. However, the expansion was tempered by a slowdown in employment growth, with services firms hiring at a more measured pace compared to recent months.

The services sector, which accounts for a substantial portion of India's gross domestic product and employment, remains a key indicator of economic health. A PMI reading above 50 indicates expansion, while the October figure points to moderate but steady growth in the sector.

The improvement in services activity comes as India's economy navigates a complex external environment while domestic consumption patterns show signs of stabilisation following earlier softness in demand.