India's services sector recovered in January by growing at the fastest pace in two months, according to data released by S&P Global on ̇Wednesday.

The seasonally adjusted HSBC India Services Purchasing Managers Index (PMI) Business Activity Index rose to 58.5 in January from 58.0 in December 2025, driven by demand buoyancy, new business gains, and tech investment.

The research showed new orders rose at the quickest pace in two months after growth had retreated to an 11-month low at the end of 2025. The new business came in mainly from the domestic market, even as there was a rise in international orders.

The new international business was primarily sourced from clients in Asian countries, including Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand, and Vietnam.

With the new orders, hiring also returned in January; however, the pace of job creation was only marginally higher.

Business confidence also rose to a three-month high in the reported month, on the back of efficiency gains, marketing efforts, and new client wins.

"While input and output prices are rising, they remain fairly mild by historical standards," said Pranjul Bhandari, Chief India Economist at HSBC.

The HSBC India Composite PMI Output Index, covering both manufacturing and services, grew to 58.4 in January from the 11-month low of 57.8 in December 2025.