Reserve Bank of India Survey Projects Positive Services Demand for Q3FY27 Amid Margin Concerns

Key facts

• The Reserve Bank of India's (RBI) latest Services and Infrastructure Outlook Survey projects a positive demand outlook for India's services sector in Q3FY27, though optimism moderated compared with the previous quarter.
• During Q2FY27, services sector companies reported improvement in overall business conditions, turnover and full-time employment.
• Services firms reported increased cost pressures with some rise in selling prices, while profit margin sentiment remained subdued.
• Firms expect cost pressures to ease moderately in Q3FY27 but expressed lower optimism about selling prices and profit margins.
• The RBI survey indicated services firms had the capacity to deliver 8.7 per cent more services during Q1FY27 using existing resources.
• Infrastructure firms remained optimistic about overall business conditions, employment and turnover during Q2FY27 and expect continued optimism through Q4FY27 and Q1FY28, with expectations of rising input costs and selling prices.