Services sector growth rate moderates in July

India's rapidly growing services industry expanded for the 15th month in July, but at a slower pace than the two-year high in June, with only growth in input prices picking up speed, a survey released Wednesday showed.

The seasonally adjusted HSBC Markit Business Activity Index, based on a survey of 400 firms, eased to 61.7 in July from 64 the previous month, staying comfortably above the 50 mark that divides growth from contraction.

The July data of the closely-watched survey still pointed to a rapid increase in activity, meeting new orders for business in communication and hospitality.

The latest readings show all the sub-indexes in the survey over the 50 mark, despite all but one of them falling on the month. The new orders index fell by about five points and business expectations by seven.

"India's service sector is gearing down a notch, albeit from an extremely fast pace. This doesn't imply that the engine is stalling, however," said Frederic Neumann, co-head of Asian economics research at HSBC.

Recent hikes in fuel prices, coupled with high food inflation, reflected in a pick-up in input price inflation, which was the only sub-index to show a rise in the survey, surging more than three points to 58.5 from 55.2 in June.