India’s Services Purchasing Managers’ Index (PMI) for April 2025 rose to 58.7, up from 58.5 in March, indicating a slight but consistent expansion in the country’s services sector.
The Composite PMI, which combines manufacturing and services activity, also climbed to 59.7 in April—up from 59.5 the previous month—marking the strongest pace of growth since August 2024. A PMI reading above 50 reflects expansion, while a reading below 50 signals contraction.
The uptick in services activity was largely driven by a sharp increase in new business inflows, which matched an eight-month high. Companies attributed the growth to favorable market conditions, strong marketing efforts, and efficiency gains that allowed them to handle more work. Among sub-sectors, finance and insurance stood out with the strongest expansion in both output and new orders.
India’s services activity rose at a faster pace than last month. New export orders rebounded strongly after March, growing at the fastest rate since July 2024. Easing cost pressures and rising selling prices improved profit margins. While business optimism remained, confidence levels dipped slightly.
India’s Manufacturing PMI touched a 10-month high at 58.2 in April, a modest rise from 58.1 in March. This rebound followed a slump to 56.3 in February and was supported by higher production, employment, and stock accumulation.
Meanwhile, the Index of Industrial Production (IIP) growth for March rose to 3%, recovering from a six-month low of 2.72% in February. However, industrial output growth for the full fiscal year (FY25) stood at a four-year low of 4%.
To support economic momentum, the Reserve Bank of India lowered its repo rate by 25 basis points to 6% in April, shifting its policy stance from “neutral” to “accommodative.” This marked the second rate cut in 2025, following a reduction from 6.5% to 6.25% in February, and suggests the possibility of further easing ahead.