India’s services sector continued to expand robustly in July, though at a slightly slower pace compared to June, according to a monthly survey released on Monday. The HSBC India Services Business Activity Index recorded a figure of 60.3 for July, down marginally from 60.5 in June.

Despite the slight deceleration, the index indicates strong growth, with readings above 50 signaling expansion in the sector. The continued robust performance is attributed to strong demand conditions and increased investment in technology.

However, the survey also highlighted a rise in inflationary pressures. Rising costs have been a significant factor contributing to the uptick in inflation, even as the services sector remains buoyant. Companies are facing higher costs which are impacting overall price levels, despite the growth in business activity.

The July figures suggest that while the services sector remains on a strong growth trajectory, cost pressures and inflationary concerns are emerging as challenges. The robust demand has been a key driver, but managing rising costs will be crucial for sustaining growth in the coming months.

Overall, the data reflects a resilient services sector amid a complex economic landscape, where growth is tempered by the challenges of rising costs. As businesses continue to navigate these pressures, the sector’s ability to maintain expansion while managing inflation will be closely monitored.