Services Sector Activity Hits 14-Month Low in March

India's Services Activity Slows to 14-Month Low in March

India's services sector experienced a loss of momentum in March, with the Purchasing Managers' Index (PMI) reading dropping to 57.5, a 14-month low. This decline comes after a reading of 58.1 in February. The current PMI reading is the lowest since January 2025, when the index stood at 56.5.

A closer look at the data reveals that the moderation in services activity was milder compared to the manufacturing sector. The manufacturing PMI fell more sharply to 53.9 in March from 56.9 in February, marking a near four-year low. This significant drop in manufacturing activity highlights the sector's vulnerability to the current economic slowdown.

Historically, India's services PMI has remained consistently strong, with readings largely in the range of 58–63 throughout 2025. The index peaked at 62.9 in August 2025 before gradually easing in subsequent months. However, on a year-on-year basis, services PMI declined from 58.5 in March 2025 to 57.5 in March 2026.

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The data indicates that while both sectors are experiencing a slowdown, the deceleration in services has been gradual compared to the sharper drop in manufacturing momentum. Manufacturing activity showed a sharper correction, with the manufacturing PMI staying in the 55–59 range through 2024 and 2025 before dropping to 53.9 in March 2026.