### India's Services Sector Growth Reaches Two-Month High in January In January 2026, India's services sector demonstrated a notable recovery, with the Purchasing Managers' Index (PMI) rising to **58.5**, marking a two-month high. This increase was primarily driven by a surge in new business intake and output, as service providers responded to growing demand, particularly from international markets such as Indonesia, Qatar, Sri Lanka, and Vietnam. Despite this positive trend, job growth remained nearly stagnant, indicating a cautious approach to hiring among service providers. The PMI's rise from **58.0** in December reflects a significant rebound from an 11-month low, suggesting a strong start to the year for the services sector [https://www.rediff.com/business/report/indias-services-sector-growth-touches-2-month-high-in-jan/20260204.htm, https://www.cnbctv18.com/economy/sp-global-hsbc-pmi-indias-services-activity-rebounds-in-january-jobs-growth-nearly-flat-ws-l-19841170.htm, https://www.etnownews.com/economy/india-services-sector-growth-hits-2-month-high-in-january-pmi-report-article-153558269]. ### Breakdown of India's Services Sector Performance 1. **PMI Growth**: The Services PMI rose to **58.5**, indicating robust growth in the sector, driven by increased new orders and output [https://www.firstpost.com/business/india-services-activity-rises-in-january-pmi-58-5-hiring-remains-muted-13976027.html]. 2. **New Business and Export Demand**: The growth was significantly supported by a rise in new export businesses, particularly from Southeast Asia, which contributed to the fastest expansion since November [https://www.marketscreener.com/news/india-services-activity-ticks-up-in-january-pmi-shows-ce7e5bd3de8cf223]. 3. **Hiring Trends**: Despite the growth in business activity, hiring remained muted, with many service providers adopting a cautious stance towards increasing their workforce [https://www.devdiscourse.com/article/business/3792869-indias-services-sector-surges-pmi-hits-two-month-high]. 4. **Inflation and Costs**: While input and output costs increased, the rate of inflation was reported to be moderate compared to historical standards, suggesting manageable cost pressures for service providers [https://www.newkerala.com/news/a/india-services-pmi-rebounds-585-jan-hiring-resumes-510.htm]. ### Supporting Data and Metrics - **PMI Figures**: - January 2026: **58.5** - December 2025: **58.0** - **Key Drivers**: - Increased new business intake - Growth in export demand from regions like Indonesia, Qatar, Sri Lanka, and Vietnam - **Job Growth**: Remained nearly flat, indicating a cautious approach to hiring despite the positive business outlook [https://www.whbl.com/2026/02/03/india-services-activity-ticks-up-in-january-pmi-shows]. ### Summary of Findings **India's services sector is showing promising signs of recovery**, with the PMI reaching a two-month high of **58.5** in January 2026. This growth is attributed to increased new business and export demand, particularly from Southeast Asia. However, the sector's hiring remains cautious, reflecting a wait-and-see approach among service providers. The moderate inflation rates suggest that while costs are rising, they are not yet a significant burden on the sector's growth trajectory. 1. **PMI Growth**: The rise to **58.5** indicates strong sector performance. 2. **New Business Demand**: Significant contributions from international markets. 3. **Cautious Hiring**: Job growth remains stagnant despite positive business conditions. 4. **Inflation Management**: Costs are rising but remain manageable. This comprehensive overview highlights the resilience of India's services sector as it navigates through a complex economic landscape [https://www.thehindubusinessline.com/economy/services-pmi-rose-to-2-months-high-of-585-in-january/article70590337.ece, https://www.awazthevoice.in/business-news/india-services-pmi-hits-two-month-high-in-january-50407.html].