On May 3, India’s services sector plunged in April as the sector’s Purchasing Managers’ Index (PMI) upsurged to 62.0 from 57.8 in March, according to the S&P Global data.

At 62.0, the services PMI is the highest in almost 13 years. It stayed above the key level of 50, separating expansion activity from a contraction for 21 months in a row.

In April, the services PMI data came after the manufacturing PMI increased to a four-month high of 57.2.

As a result, the composite PMI, combining the manufacturing and services indices, soared to 61.6 in April from 58.4 in March. The April composite PMI of 61.6 is the highest since July 2010.

S&P Global said that new orders have increased since June 2010. Survey members connected growth to robust demand for services and competitive pricing. Finance & Insurance beat the sector rankings for sales.

Within new orders, international demand for India’s services enhanced further in April, with new export orders increasing for the third month and at the fastest pace.

India’s services exports are flourishing, with the latest Balance of Payments data displaying in October-December, the services trade surplus rose to a record $38.7 billion from $34.4 billion in the July-September quarter.

The rise in inflationary pressures will concern policymakers, particularly those at the Reserve Bank of India (RBI). While headline retail inflation fell to 5.66% in March, falling even lower to sub-5% in April. RBI’s Monetary Policy Committee warned that its decision to keep rates on hold on April 6 was a pause, not a decisive shift. To tackle the increased inflation, the rate-setting panel augmented the policy repo rate by 250 bps in 2022-23 to 6.5%.