Services PMI rebounds to 58.5 in January, signalling strong start to 2026

Services PMI

India’s services sector activity rebounded in January, with the Purchasing Managers’ Index (PMI) rising to 58.5 from 58 in the previous month, data released on February 4 shows.

The reading marks a strong start to the year after December saw the weakest expansion in 15 months. January’s PMI remains lower than the 2025 average of 59.4.

The rebound in services mirrors improving conditions in manufacturing, where the pace of expansion also picked up. Manufacturing PMI rose to 55.4 in January from 55 in December, pointing to a broad-based recovery across key segments of the economy.

Moneycontrol Economy Pulse, a real-time indicator of economic momentum, had signalled a faster pickup in December.

The improvement in business activity comes amid expectations of stronger external and domestic tailwinds in 2026. Business sentiment had risen to a three-month high in January.

India’s growth outlook has been bolstered by the conclusion of trade agreements with the European Union and the United States, which are expected to improve export competitiveness and investment sentiment.

On February 2, US President Donald Trump announced that tariffs on India would be reduced to 18 percent from 50 percent. Economists, as reported by Moneycontrol, estimate that the US trade deal alone could add 20–30 basis points to India’s GDP growth.

Taken together, the pickup in services and manufacturing activity suggests that India has entered the new year with solid economic momentum, supported by easing trade frictions and improving global demand conditions.