India’s services sector further strengthened its dominance in the economy in the first half of FY 2025–26, with its share in GDP rising to 53.6%. According to the First Advance Estimates (FAE) for FY 2025–26, services accounted for a record 56.4% of Gross Value Added (GVA), underscoring the expanding role of modern, tradable, and digitally delivered services in driving economic growth.
Additionally, India is the world’s seventh-largest exporter of services, with its share in global services trade more than doubling from 2% in 2005 to 4.3% in 2024. The services sector continues to be the largest recipient of foreign direct investment inflows, accounting for an average of 80.2% of total FDI during FY 2022-23 - FY 2024-25, up from 77.7% in the pre-pandemic period (FY 2015-16 - FY 2019-20).
In countries like India, where services contribute a large share of GDP, the Services PMI gives an early signal of economic momentum.
The services sector saw a slight deceleration, with its PMI easing to 58.1 in February 2026, and new business growth hitting a 13-month low. This was hindered by intense competition among providers and tougher competition despite extra marketing by the firms.
India Services PMI
| Month | PMI Services |
| January 2025 | 56.5 |
| February 2025 | 59.0 |
| March 2025 | 58.5 |
| April 2025 | 58.7 |
| May 2025 | 58.8 |
| June 2025 | 60.4 |
| July 2025 | 60.5 |
| August 2025 | 62.9 |
| September 2025 | 60.9 |
| October 2025 | 58.9 |
| November 2025 | 59.8 |
| December 2025 | 58.0 |
| January 2026 | 58.5 |
| February 2026 | 58.1 |
India’s service PMI is 58.1, which is still well above 50 but below January’s reading of 58.5 and forecasts of 58.6. It still suggests that the service sector is expanding. While new order growth slowed to a 13-month low due to rising competition, international sales rose at the fastest pace since August 2025. This resulted in firms hiring more talent, with the rate of job creation surpassing its long-term trend. Additionally, services companies faced mild operating capacity pressures, reflected in a second monthly rise in backlogs. Cost pressures got really bad with the prices of things that companies buy going up to a two-and-a-half-year high. This is because of the high food costs, and companies are spending more money on energy, workers, and commodities. Output price inflation also rose to a six-month high.
Even with all these uncertainties, companies are feeling more optimistic about the future. Additionally, companies are looking forward to expanding their presence in both existing and new markets.
In India, according to Trading Economics, the Services PMI is expected to be 59 points by March 2026. For the long term, the India Services PMI is projected to trend around 60 points in 2027 and 54.00 points in 2028.
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