Services output saw a slight and softer expansion across the country in September, the latest reading of the Nikkei Business Activity Index showed.
This index was down from 51.8 in August to 51.3 in September.
Reflecting weakest rate of expansion in the current period of growth, the Nikkei India Composite PMI output index fell from 52.6 in August to 51.5 in September.
Incoming new work at service providers rose for the third month in succession during September. However the rate of expansion eased since August.
As a consequence of the slowdown, Indian service providers maintained employment levels broadly unchanged in September.
This was indicated by the respective index recording only fractionally below the crucial 50.0 threshold. A similar trend was seen in the manufacturing sector.
Input costs decline
Input costs faced by services firms decreased in September for the first time in ten months, with survey participants reporting lower petrol prices.The decline in cost burdens was however only marginal.
With purchase prices also falling at manufacturers, overall input costs across the private sector as a whole declined for the first time in six-and-a-half years.
The level of outstanding business held by Indian service providers fell again in September. This was the third consecutive monthly drop in backlogs, although the rate of depletion was marginal overall.
Services activity is expected to rise over the coming 12 months, with firms linking optimism to favourable government policies, planned increase in marketing budgets and hopes of better economic conditions.
That said, the degree of confidence was the weakest registered in Survey history.
Commenting on the Indian Services PMI survey data, Pollyanna De Lima, economist at Markit,which compiles the survey said: "India's economy lost steam in September with growth fading across both the manufacturing and services sectors. The sluggish increase in private sector output mirrored softer demand conditions across the country, while growth of global demand for Indian goods also moderated."