New Delhi, June 4 -- After the purchasing managers' index (PMI) for manufacturing climbed to a three-month high of 55.0 in May, India's services sector seems to have outdone that expansion with its PMI at 59.8, the highest in six months.

The big margins by which these exceed the 50-mark-which separates expansion from contraction-signals a strong performance. Not only has activity held up in the face of the West Asia crisis, the economy may have gained some momentum.

For this, thank India's domestic economic drivers, which may have more than offset export headwinds. Interestingly, input cost pressures eased in May. This is counter-intuitive, given broadly costlier energy. Nevertheless, it provides businesses some leeway to defend margins...