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Business
India's Business Activity Hits Four‑Year Low in July as Services Sector Slumps
✍️ Moneycontrol.com
🗓 05 Aug 2026, 01:40 PM
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India's composite business activity index fell to its lowest level in over four years in July, driven by a sharp decline in the services sector.
India's composite business activity index slipped to a four‑year low in July, marking the weakest performance in the sector since early 2020. The decline was largely attributed to a steep drop in the services Purchasing Managers' Index, which fell below the 50‑point threshold that separates growth from contraction. Manufacturing activity remained relatively stable, but the contraction in services outweighed any gains from industry. The data, released by the Federation of Indian Chambers of Commerce & Industry (FICCI) and the Centre for Monitoring Indian Economy (CMIE), signals a slowdown in overall economic momentum.
Analysts note that the services sector, which accounts for a significant share of India's GDP, has been under pressure due to reduced domestic demand and tightening credit conditions. The downturn is expected to affect employment and investment decisions across the country.
The report also highlights that the decline in services activity could have ripple effects on related sectors such as real estate, retail, and tourism, potentially leading to a broader slowdown in the economy.
Analysts note that the services sector, which accounts for a significant share of India's GDP, has been under pressure due to reduced domestic demand and tightening credit conditions. The downturn is expected to affect employment and investment decisions across the country.
The report also highlights that the decline in services activity could have ripple effects on related sectors such as real estate, retail, and tourism, potentially leading to a broader slowdown in the economy.