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India’s services PMI touched a two-month high of 58.5 in January, up from 58 in December.
Services PMI is a key indicator of activity in sectors like IT, banking, hotels and transport.
Why this matters: December had actually marked the weakest expansion in 15 months, so January’s pickup signals that things are improving. That said, the number is still slightly below the 2025 average of 59.4, so it’s a rebound, not a boom.
What’s driving the improvement: manufacturing PMI which rose to 55.4 in January, from 55 in December, pointing to a broader recovery across the economy. Business confidence picked up to a three-month high in January, helped by expectations of stronger demand.
Big picture: India’s growth outlook has received a boost from recent trade deals with the EU and the US. These agreements are expected to improve exports and attract investment.
Economists estimate that the US trade deal alone could add 20–30 basis points to India’s GDP growth. With services and manufacturing both picking up, India is entering 2026 with decent economic momentum.
