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India’s economic activity continued to expand at a fairly rapid pace in February, with both services and manufacturing improving, a flash survey by HSBC Holdings Plc showed.

The services purchasing managers’ index rose slighly to 62 from 61.8 in January, while the manufacturing index increased to 56.7 from 56.5. The composite index climbed to a seven-month high of 61.5.

The indexes are based on preliminary survey results and the final PMI data will be published next month. A reading above 50 indicates expansion compared with the previous month, while a print below that indicates contraction in activity.

“Encouragingly, new export orders rose sharply, particularly for goods producers,” Pranjul Bhandari, chief India economist at HSBC, said in a statement. “Producers were able to do both – lower the rate of increase in output prices and improve margins.”

The survey participants attributed the upturn to buoyant demand conditions, investment in technology, efficiency gains, expanded clientele and favorable sales developments, HSBC said.

The pickup in the services industry, which makes up more than half of the nation’s gross domestic product, bodes well for India’s growth prospects. The government expects the economy will expand 7% in the coming fiscal year beginning in April, making it one of the fastest-growing major economies in the world.

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