According to S&P Global India services PMI data, India's dominant services industry expanded at the fastest rate in over eleven years in June due to strong demand, but stubborn inflation remains a concern as prices charged rose at the fastest rate in nearly five years.
The S&P Global India Services Purchasing Managers' Index increased to 59.2 in June, up from 58.9 in May, marking the highest level since April 2011.
The S&P Global India Composite PMI Output Index was strong overall at 58.2, down from 58.3 in May. The factory PMI fell to a 9-month low in June, according to previous data. A reading above 50 distinguishes between growth and contraction.
"Demand for services improved...supporting a robust economic expansion for the sector over the first quarter of the fiscal year 2022/23 and setting the scene for another substantial upturn in output next month," said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.
A sharp increase in demand increased sales, and favorable economic conditions kept the new orders sub-index above the breakeven point for the eleventh consecutive month, driving it to its highest level since February 2011. Despite falling to a three-month low in June, input cost inflation remained elevated compared to historical levels due to higher costs for chemicals, food, and gasoline.