India's January composite PMI of 56.3 comes in at a 7-year high whereas services PMI signals strongest show of 7 year high of 55.5 in January.

India's January manufacturing activity as earlier announced had hit near eight-year high as orders jump.

The services sector started 2020 on a strong note with the IHS Markit India Services Business Activity Index coming in at 55.5 in January 2020, up from 53.3 in December 2019. This signalled the strongest upturn in output for seven years.

High demand pushed the fastest increase in new orders and output for seven years. As a result, job creation was sustained and business optimism maintained, the latest IHS Markit Services PMI showed.

The Composite PMI Output Index increased from 53.7 in December to a seven-year high of 56.3 in January. January data showed that growth of private sector activity moved up a gear, amid broad based accelerations across manufacturing and services.

The main factor boosting growth was a sudden wave of new businesses. Aggregate sales rose at the sharpest pace since January 2013, with quicker increases evident at goods producers and service providers, according to IHS Markit.

"The Indian service sector sprung to life at the start of 2020, defying expectations of fragility and building on the momentum gained at the end of 2019," Pollyanna De Lima, principal economist at IHS Markit, said in a statement.

"With business revenues rising, service providers continued to increase capacity to meet further strong growth in sales. This is good news for jobseekers, particularly when we consider the results from the manufacturing industry which showed the steepest upturn in employment since August 2012."

A sub-index tracking new business also climbed to its highest since January 2013, encouraging firms to maintain a strong hiring rate.

Yet, not everything was rosy. New export business - a proxy of foreign demand - contracted last month, falling to its lowest since May 2018 on weaker demand from China, the United States and Europe.

Pressure could heighten further amid growing global risks from China's coronavirus epidemic which has rapidly spread to other countries and claimed nearly 500 lives, mainly in mainland China, it said.