India's services activity saw a marginal rise in pace in May, as the seasonally adjusted HSBC India Services PMI Business Activity Index came in at 58.8 against a level of 58.7 recorded in April, according to data released by research firm S&P on Wednesday.

A PMI reading above 50 shows sector expansion, while a reading below 50 indicates a contraction, and 50 shows no change.

As per the report, the growth was driven by strong demand, new client wins, and greater staffing capacity.

The month saw an intensification of input cost and output charge inflation, with rates of increase coming above their historical averages in each case.

"Strong international demand continued to fuel services activity, as evidenced by the new export business index's uptick from April," said Pranjul Bhandari, Chief India Economist at HSBC.

The data showed one of the strongest improvements in international demand in 19-and-a-half years of data collection.

Despite the growth in the services sector, the slow growth in manufacturing activity dragged the composite PMI growth down.

The HSBC India Composite PMI Output Index came at 59.3 in May, down silghtly from 59.7 in April.