New Delhi, Feb. 5 -- Growth in India's services sector picked up pace in January as faster expansion in new business and output lifted overall activity at the start of 2026, according to the HSBC India services PMI released by S&P Global on Wednesday. With manufacturing activity also picking up pace in January, the composite PMI of manufacturing and services also increased compared to December. The seasonally adjusted HSBC India Services PMI Business Activity Index rose to a two-month high of 58.5 in January, up from 58.0 in December. Manufacturing PMI - its data was released on February 2 -- increased from an 11-month low in December to 55.4 in January. As expected the HSBC India Composite PMI Output Index, which combines manufacturing and services activity, also improved: from to 57.8 in December, a 11-month low, to 58.4 in January. The increase reflected stronger growth across both goods producers and service providers, pointing to a broad-based pickup in private-sector activity at the start of the year. To be sure, both manufacturing and services indices have now remained above the 50-mark, which separates growth from contraction, for over four years. "India's services PMI rose to 58.5 in January, up from 58.0 in December, signalling sustained momentum in the sector," said Pranjul Bhandari, chief India economist at HSBC. "Robust output growth was driven by a steady influx of new orders, including increased international demand from South and Southeast Asia," she added. New business inflows strengthened during the month, rising at the quickest pace in two months after slowing to a 11-month low at the end of 2025. Firms attributed the improvement to demand buoyancy, greater client interest and a stronger online presence, alongside continued investment in technology. Among sub-sectors, finance and insurance recorded the fastest growth in both output and new orders. To be sure, they were also the only segments to record a slowdown since December. Domestic demand remained the primary driver of growth, but export demand also improved. New export orders rose solidly and at the fastest pace in three months, supported by gains from markets such as Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand and Vietnam. Improving sales conditions prompted service providers to resume hiring in January, reversing the stagnation seen in December. However, the pace of job creation was modest as most of the firms had sufficient resources to meet current workloads. Input costs rose at the fastest pace since September, driven by higher prices for items such as eggs, electronic goods, meat, paper, parts and vegetables; but remained below the long-run series trend. Selling price inflation was also at a three-month high, as firms sought to balance rising costs and profitability, though overall inflation remained subdued....