India services PMI eases to 58.5 in June from 61.2 in May

A reading above 50 shows expansion in activities, while a reading below 50 shows contraction.

As per the private survey, the upturn in June services activities stemmed from ongoing increases in new business, a healthy demand environment, and marketing initiatives.

"Service providers in India continued to signal positive demand trends in June, which underpinned a stronger increase in new business volumes and further job creation," the survey revealed.

It further said that output growth remained sharp despite softening to a three-month low, while confidence in growth prospects strengthened.

On the price front, there were mixed trends. Input costs rose at a slower rate that was broadly aligned with their long-run average, but charge inflation quickened to a near six-year high.

Service providers participating in the survey noted a sharp and quicker expansion in intakes of new business at the end of the first fiscal quarter.

"Positive demand trends, advertising, and favourable market conditions were among the reasons cited by survey participants for the latest upturn in sales," said S&P Global.

There was also an increase in new export business during June. The rise was the fifth in successive months, but modest and slower than in May.

Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said that demand for Indian services continued to surge higher in June, with all four monitored sub-sectors registering quicker increases in new business inflows.

"This bullish pick-up in growth momentum supported a further sharp upturn in business activity and encouraged another uplift in employment figures, boding well for near-term growth prospects. Job creation in fact also reflected positive forecasts among companies about the year ahead outlook for output," said the economist.