India's October Services PMI Drops To 58.4, Down From 61 In September Amid Rising Inflation

India's Services Purchasing Managers' Index (PMI) for October stood at 58.4, according to S&P Global Ratings.

While this indicates a slight drop from September's 61 and August's 60.1 figure, the Indian service sector continued to demonstrate impressive growth.

Anecdotal evidence suggests that this growth is driven by securing new contracts, favorable demand trends, and positive market conditions.

The persistent demand for Indian services has contributed to sustained business activity growth at the outset of the third fiscal quarter.

Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, noted, "The Indian service economy continued to register impressive growth, despite the increases in business activity and new work intakes softening from September's over 13-year highs", as reported by Business Standard.

She added, "Exports were an area of particular strength in October, with new business gains from Asia, Europe, and the US boosting growth to its second-highest level in the series over a nine-year history."

In October, there were faster increases in input costs and output charges, with inflation rates surpassing their long-run averages.

Pollyanna explained, "Inflationary forces in the Indian service sector intensified, primarily as a result of surging food, fuel, and staff costs. Although survey participants passed these additional cost burdens on to clients, permitted by demand strength, the rise in charges could have been the trigger of the deceleration in sales growth."