The HSBC flash PMI rises to 59.5, beating expectations, with manufacturing and services seeing faster expansion and hiring picking up.
India’s private sector began 2026 on a stronger footing, with business activity accelerating in January as demand improved, prompting firms to step up hiring, a survey showed on Friday.
The HSBC flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 59.5 in January from an 11-month low of 57.8 in December. The reading was also above a Reuters poll median forecast of 58.0. A PMI reading above 50 indicates expansion, while a level below that signals contraction.
The rebound was driven by stronger new orders, a key measure of demand, which lifted sales across both manufacturing and services. Manufacturing activity expanded at a slightly faster pace than services.
“After losing some momentum at the end of 2025, new orders rose more rapidly in January, led by a faster pickup in domestic orders,” said Pranjul Bhandari.
New export orders also increased at their fastest pace in four months, despite trade headwinds. The United States, India’s largest trading partner, had imposed steep tariffs on Indian exports last year, though discussions are now underway between Indian and US leaders to revive a bilateral trade agreement after talks collapsed previously.
Manufacturing PMI climbed to 56.8 in January from 55.0 in December, marking its highest level since October. Services activity also gathered momentum, with the services PMI rising to 59.3 from 58.0 a month earlier.
Improving demand conditions encouraged companies to resume hiring, albeit at a modest pace, after employment levels had stalled in December.
At the same time, cost pressures intensified. Input price inflation rose to a four-month high, with service providers reporting sharper increases than manufacturers. Firms passed on higher costs to customers, pushing output price inflation to a three-month high.
Despite inflationary pressures, business confidence improved to a three-month high in January, indicating that India’s economic outlook remains resilient ahead of the Union Budget on February 1, which is expected to focus on fiscal consolidation.
End of Article
