India’s private sector activity rebounded in January after losing momentum at the end of 2025, according to the latest HSBC Flash India Purchasing Managers’ Index (PMI) data released by S&P Global.
The HSBC Flash India Composite Output Index rose to 59.5 in January from an 11-month low of 57.8 in December, indicating a sharp expansion in combined manufacturing and services output. The index reading remained above its long-run average, reflecting improved business conditions across the private sector.
According to the report, “growth across India’s private sector economy bounced back in January,” supported by “quicker increases in new orders and output, alongside the reinstatement of job creation and a rebound in business confidence.” The report added that trends “improved at both manufacturers and service providers,” while input cost and output charge inflation “remained moderate despite quickening since December”.
The acceleration in activity was driven by a faster expansion in new business inflows. Survey respondents cited “strengthening demand conditions and aggressive marketing campaigns” as key factors supporting higher sales. While manufacturers recorded a quicker upturn than service providers, growth improved across both sectors.
International demand also showed improvement. January data indicated “a marked upturn in aggregate international orders,” the strongest in four months, with Asia, Australia, Europe, Latin America and the Middle East identified as key export destinations for Indian goods and services.
Employment conditions improved during the month, with hiring resuming across the private sector after stagnating in December. Although job creation remained modest, the pace was described as broadly aligned with long-term trends, with firms reporting additions at junior and mid-level positions to better match business requirements.
Commenting on the data, Pranjul Bhandari, Chief India Economist at HSBC, said:
“Growth, as signalled by the HSBC flash PMI, picked up pace for both manufacturing and services. Despite the rise in the manufacturing PMI, January’s figure remained below the 2025 average. After losing some momentum at the end of 2025, new orders rose more rapidly – led by a faster pick up in domestic orders. Input cost pressures rose quickly, though more for goods producers than for service providers”.
The report noted that input prices rose at the fastest pace in four months, though the increase was described as “modest by historical standards.” Firms reported higher costs related to food items, fuel, steel, labour and transportation, with some of these pressures passed on to customers to protect margins.
Looking ahead, private sector firms remained optimistic about the 12-month outlook. While overall business confidence stayed below its long-run average, sentiment rose to a three-month high, supported by expectations of efficiency gains, demand buoyancy, marketing investments and favourable exchange rates.
Data for the HSBC Flash India PMI were collected between 9 and 20 January 2026 and are based on responses from around 80-90 per cent of the total survey panel, providing an early indication of final PMI readings.
