India's services sector edged up a significant boost in January, reaching its highest point in six months due to increased demand and a surge in new export sales, according to recent data from a private survey.

The HSBC India Services PMI, which measures activity in the services sector, climbed to 61.8 in January from 59 in December, marking the sharpest expansion in six months and surpassing the preliminary estimate of 61.2. This indicates sustained growth in India's services sector for the 30th consecutive month, with a reading above 50 indicating expansion.

The surge in business activity was particularly notable in January, with new business growing at the fastest rate since July 2023. Additionally, new export sales saw a significant increase, reaching their highest level in three months. According to Ines Lam, an economist at HSBC, this indicates robust performance in India's services exports.

The growth in new sales was attributed to factors such as increased advertising, positive demand trends, and securing new clients. Furthermore, there was a notable increase in new export orders for Indian service providers, with gains reported from clients worldwide, including countries like Afghanistan, Australia, Brazil, China, Europe, the UAE, and the US.

The HSBC India Composite PMI, which combines both manufacturing and services PMI indices, also saw a substantial increase, rising from 58.5 in December to 61.2 in January, marking the sharpest upturn since mid-2023.

Sales in the private sector, largely driven by service providers, experienced the quickest growth in six months. However, this growth was accompanied by a notable increase in input costs, leading to the highest rate of input price inflation in three months. Despite this, prices charged for Indian goods and services rose at the slowest rate in ten months, according to the release.

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