### India's Services Sector Growth Moderates to 11-Month Low in December 2025 In December 2025, India's services sector experienced a notable slowdown, with the HSBC India Services PMI Business Activity Index declining to **58.0**, down from **59.8** in November. This marks the slowest rate of expansion in nearly a year, primarily driven by a deceleration in new business orders and output. Companies have also shown reluctance to hire additional staff, reflecting a cautious approach amid economic uncertainties. The PMI reading indicates that while the sector continues to expand, the momentum has significantly weakened, raising concerns about future growth prospects in the services industry [https://www.hindustantimes.com/india-news/growth-in-india-s-services-sector-moderated-in-december-101767729610843.html][https://www.rediff.com/business/report/indias-services-sector-activity-eases-in-dec/20260106.htm]. ### Breakdown of the Current Situation in India's Services Sector 1. **Decline in PMI**: The HSBC India Services PMI fell to **58.0**, indicating a slowdown in growth compared to the previous month [https://www.livemint.com/economy/india-pmi-services-sector-december-manufacturing-sector-new-businesses-11767694525026.html]. 2. **New Business Orders**: The rate of expansion in new work orders has eased, reaching its slowest pace in **11 months**, which has contributed to the overall decline in business activity [https://www.cnbctv18.com/economy/india-services-pmi-slips-to-11-month-low-in-december-as-demand-and-hiring-weaken-ws-l-19815102.htm]. 3. **Hiring Stagnation**: Companies are refraining from recruiting additional staff, reflecting a cautious outlook on future demand and economic conditions [https://www.firstpost.com/india/indias-december-pmi-shows-services-growth-at-11-month-low-as-demand-and-hiring-soften-13965880.html]. 4. **Market Sentiment**: Despite the slowdown, there remains a level of confidence among businesses regarding future activity, although overall sentiment has dipped to its lowest in over three years due to market uncertainties [https://www.deccanchronicle.com/business/december-services-pmi-growth-moderates-confidence-dips-exports-shine-1928713]. ### Supporting Data and Evidence - **PMI Index**: The PMI index dropped from **59.8** in November to **58.0** in December, indicating a significant slowdown in growth [https://www.livemint.com/market/mark-to-market/india-business-activity-services-manufacturing-pmi-slowdown-economic-outlook-11767689421604.html]. - **Hiring Trends**: The reluctance to hire additional staff is evident, as companies are cautious about expanding their workforce amid declining new orders [https://www.newindianexpress.com/business/2026/jan/06/india-services-growth-loses-steam-as-pmi-hits-11-month-low-in-december]. - **Economic Outlook**: The overall economic outlook remains uncertain, with inflation and competition cited as concerns by businesses, which may hinder recovery in domestic demand [https://www.livemint.com/economy/india-pmi-services-sector-december-manufacturing-sector-new-businesses-11767694525026.html]. ### Conclusion: Implications of the Services Sector Slowdown The recent data indicates a **significant moderation** in India's services sector growth, with the PMI reflecting the slowest expansion in **11 months**. This trend raises several implications for the economy: 1. **Economic Growth Concerns**: The slowdown in the services sector could signal broader economic challenges, particularly if it persists into the coming months. 2. **Hiring and Investment**: Companies' reluctance to hire may lead to stagnation in job creation, impacting consumer spending and overall economic activity. 3. **Future Outlook**: While there is some confidence in future business activity, the decline in sentiment suggests that businesses are wary of potential economic headwinds, including inflation and competitive pressures. In summary, the moderation in the services sector growth is a critical indicator of the current economic landscape in India, necessitating close monitoring and strategic responses from policymakers and businesses alike [https://www.hindustantimes.com/business/indias-service-sector-grows-slowest-in-nearly-a-year-in-december-2025-101767687203944.html][https://www.ndtvprofit.com/economy-finance/indias-services-growth-slows-to-11-month-low-in-december-on-weak-orders-output].