TOKYO -- The Nikkei India Services Purchasing Managers' Index, or PMI, clocked in at 48.7 in January, above December's reading of 46.8.
A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.
"India's pivotal service sector remained in contraction territory... However, a rebound in the near term is likely as rates of reduction softened and business confidence improved on the back of hopes that market conditions will soon normalise" said Pollyanna De Lima, economist at IHS Markit, which compiles the survey.
She added: "What started as a downturn driven by the 500 and 1,000 rupee notes ban appears now to be losing strength. In fact, manufacturers already saw a turnaround, with production being raised in line with higher order books. The upturn at goods producers combined with a slowdown in the contraction of services activity resulted in only a fractional drop in private sector output."
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