India’s services sector growth touched a 15-year high in August due to strong demand, leading to the fastest price increases from service providers in over a decade, according to a report released on Wednesday. 

HSBC’s India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 62.9 in August from 60.5 in July. Readings above 50.0 indicate monthly growth, while readings below that level indicate contraction.

India’s services PMI Business Activity Index hit a fifteen-year high last month, driven by a surge in new orders, according to Pranjul Bhandari, Chief India Economist at HSBC.

New business, a key gauge of demand, grew at the fastest rate since June 2010. International demand strengthened, with export orders seeing their highest increase in 14 months, the report noted.

Strong overseas demand enabled service providers to increase prices for customers more aggressively. Output price inflation reached its highest level since July 2012, and input costs increased at the fastest rate in nine months.

Intensifying price pressures could mean overall inflation, which declined to an eight-year low of 1.55 per cent in July, has reached its trough and may start spiking soon.

Business confidence for the upcoming year rose to a three-month high, driven by favourable advertising spending and positive demand forecasts.

The Composite PMI, which combines services and manufacturing, rose to 63.2 in August, up from 61.1 in July. This marks a 17-year high and shows strong economic momentum across both segments of India’s economy.

India’s GDP grew by 7.8 per cent in Q1 FY26, maintaining its status as the fastest-growing large economy, driven by services, manufacturing, and favourable monsoon conditions.

HSBC Global Investment Research on September 2 gave a ‘neutral’ stance on India, even though it maintained that five out of nine risk factors for Indian markets are improving.