India business activity fastest in at least two decades, price rises sharp, PMI shows

admin — Fri, 22 Aug 2025 00:26:00 +0000

Image used for representative purpose only.
| Photo Credit: K.R. Deepak

India private sector activity expanded at the fastest pace on record in August, fuelled by a robust surge in demand led by the dominant services sector, which allowed firms to hike prices at the fastest clip in over 12 years, a survey showed on Thursday (August 21, 2025).

The latest results stand in contrast to expectations for a slowdown in economic growth in Asia’s third-largest economy to average 6.4% this fiscal year after an unexpectedly strong 7.4% expansion during the first three months of 2025.

HSBC’s flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 65.2 in August from 61.1, confounding expectations in a Reuters poll for a decline to 60.5.

It was the highest reading since the survey began in December 2005 and remained above the 50-mark that separates growth from contraction for the 49th month.

Record expansion was underpinned by the sharpest uptick in total new orders — a key gauge of demand — in nearly 18 years.

The services sector led growth, with its activity index soaring to a survey high of 65.6. The manufacturing sector also showed significant strength — its preliminary PMI rose to 59.8, its highest reading since January 2008.

While that boosted job creation, the survey also showed companies passing on increases in input costs to customers. The output price index increased to an over 12-year high of 55.8 from 53.5 in July.

That also contradicts the recent trend of easing inflation in official data, which dropped to an eight-year low of 1.55% last month.

The Reserve Bank of India, which targets inflation in a 2-6% range, started cutting interest rates early this year to stimulate the economy and paused at the latest meeting but is expected to cut again next quarter.

Firms remained optimistic, with sentiment for the year ahead strengthening to its highest since March.

Published – August 22, 2025 05:56 am IST

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India’s April manufacturing PMI sees second-best improvement in operating conditions in three-and-a-half years

admin — Thu, 02 May 2024 06:16:56 +0000

Bolstered by current and anticipated upticks in demand, manufacturers reported higher confidence levels with expectations of higher output a year ahead. File (Representational image)
| Photo Credit: Reuters

India’s manufacturing sector activity moderated slightly in April, but still witnessed the second-best improvement in operating conditions in three-and-a-half years, as per the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) which fell to 58.8 from the 16-year high of 59.1 recorded in March.

A reading of over 50 on the index indicates growth in activity levels. There was a sharp rise in new orders which grew at the second-strongest pace in almost 40 months, with domestic demand rising faster than export orders. Output growth eased from March but was still the second highest in 42 months.

Bolstered by current and anticipated upticks in demand, manufacturers reported higher confidence levels with expectations of higher output a year ahead. Firms hired more employees at a pace that was moderate, but still the quickest since September 2023. However, the pressure on operating capacities remained mild.

Even though input costs increased, producers ramped up input purchases to the highest level since last June, and their expansion of stock inventories was the third-strongest since early 2005 when the PMI data collection began. Expectations that demand conditions will remain conducive to growth supported inventory-building initiatives, a statement on the index said.

Price increases were reported for materials like aluminium, paper, plastics and steel, and producers raised selling prices during April at the fastest pace in three months, noting that labour costs had also gone up.

“On the price front, higher costs of raw materials and labour led to a modest uptick in input costs, but inflation remains below the historical average. However, firms passed these increases onto consumers through higher output charges, as demand remained resilient, resulting in improved margins,” said Pranjul Bhandari, chief India economist at HSBC.

The India Manufacturing PMI reading for April is milder than that signalled by the Flash PMI released on April 23 which was based on 75% to 85% of responses received from firms for the survey-based index. As per the flash reading, the manufacturing PMI was pegged at 59.1 in April, recording no change from March.

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India business activity fastest in at least two decades, price rises sharp, PMI shows

India’s April manufacturing PMI sees second-best improvement in operating conditions in three-and-a-half years