Services activity hits 15-year high in August, composite PMI signals strong Q2 momentum

India’s services sector recorded its strongest-ever expansion since 2010 in August, with the HSBC India Services PMI Business Activity Index climbing to 62.9, up from 60.5 in July. This is the third straight month the index has held above 60, underscoring resilient demand in the world’s fastest-growing major economy.

The robust performance mirrors strength in manufacturing, which grew at its fastest pace in nearly 18 years during the month despite rising global uncertainty and fresh tariff headwinds from the United States. A Moneycontrol analysis found that tariffs barely had discernible impact on factory activity or sentiment, with most Asian economies also reporting an uptick in manufacturing PMIs.

The broad-based momentum bodes well for India’s growth. The economy expanded 7.8 percent in the first quarter of FY26, beating forecasts, and high-frequency data suggest the resilience likely continued into the second quarter.

The composite business activity index, which blends responses from manufacturers and service providers, rose to a 17-year high of 63.2 in August from 61.1 in the previous month, signalling that both pillars of the economy are firing in tandem.