India Services Growth Hits 14-Month Low on Geopolitical Risk

India’s services sector experienced its most sluggish expansion in over a year during March, as the ongoing conflict in the Middle East weighed on domestic demand. According to the latest Purchasing Managers' Index (PMI) data, the sector’s growth rate dropped to a 14-month low, dampening the country's broader economic momentum.

Despite the cooling domestic environment, the industry demonstrated resilience in international markets. Overseas demand for Indian services remained robust, climbing to near-record levels during the period. However, operational pressures mounted as companies faced a significant intensification in input costs.

Even with these mounting cost pressures and a slowdown in general activity, the sector continued to bolster its workforce. Employment figures saw a steady expansion throughout March. Furthermore, business sentiment appears largely unaffected by the immediate obstacles; corporate confidence regarding the 12-month outlook reached a 12-year high, signaling that firms remain optimistic about a long-term recovery despite the current geopolitical uncertainty.