The services sector in India expanded at its fastest pace so far this year in March as an easing of Covid-19 restrictions boosted demand, but elevated inflationary pressures clouded business confidence, a private survey showed.
The S&P Global India Services Purchasing Managers' Index rose to 53.6 in March from 51.8 in February, beating the 52.5 estimates in a Reuters poll.
While the index remained above the 50-mark separating growth from contraction for an eighth straight month, input costs rose at the sharpest pace in 11 years.
Higher chemical, fuel, raw materials, retail, transportation, and vegetable prices increased operating expenses, dampening business confidence. Domestic demand increased on high footfall, leading to rising sales and pushing the new business sub-index to a three-month high. However, international demand contracted at its sharpest rate in six months as the Russia-Ukraine war-affected supply chains.
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