Services Sector: The business activity index fell to 60.6 in February from 61.8 in January.

India's services sector growth weakened in February but remained robust despite a slowdown in new orders and production, according to a private survey on Tuesday. HSBC's seasonally adjusted index of Indian services sector business activity fell to 60.6 in February from 61.8 in the previous month. A reading above 50 indicates growth.

"A decline after a six-month peak in January was expected, but a value above 60 still indicates a strong growth momentum," said Rahul Bajoria, managing director and head of EM Asia (excluding China) economics, Barclays.

Despite the decline, activity in the services sector reached its second highest level in five months in February, but softer growth during the month has muddied the business outlook. "With growth in new orders and production slowing, the outlook for activity for companies in the services sector, while still positive, has weakened slightly," said Ines Lam, an economist at HSBC.

Of the 400 firms surveyed over the period, 26% expect growth in the next year, but 2% forecast a decline. Employment has also suffered, with surveyed members indicating sufficient numbers of employees. "Where there was optimism, firms cited active client interest, greater publicity and improved client relationships," the report said.

Finance and insurance recorded the highest growth rates among all services sectors, while real estate and business services posted the lowest growth rates in February.

There was good news on inflation as cost of production growth slowed at the second lowest level in 42 months, leading to lower service prices. "Service prices rose at the slowest pace in 24 months as input cost inflation eased," Lam said. Services inflation hit its lowest level in four years in January and is likely to remain stable in February, which will affect core goods inflation.

As strong growth data shows, India's central bank has the ability to leave interest rates at current levels for a longer period than previously expected. Experts assume that the central bank's monetary committee is unlikely to change the interest rate at 6.5% at its next meeting in April.