India’s private sector business grew to an eight-month high in April fueled by robust demand, particularly a surge in foreign orders for manufactured goods, according to a survey by HSBC Holdings Plc.
Rising from a final reading of 59.5 in March to 60 in April, the HSBC Flash India Composite Output Index – a seasonally adjusted index that measures the month-on-month change in the combined output of India’s manufacturing and service sectors – highlighted the fastest rate of expansion since August 2024.
There were quicker increases across both the manufacturing and service sectors, with the former seeing the sharper upturn, according to the report.
“New export orders accelerated sharply, likely buoyed by the 90-day pause in the implementation of tariffs (by US). As a result, output and employment grew, for both, manufacturers and service providers,” said Pranjul Bhandari, Chief India Economist at HSBC.
“Cost inflation was in line with March levels, but prices charged rose a tad faster, leading to improved margins.”
The 50-mark separates growth from contraction.
Manufacturing growth underpinned the strong performance, with the index rising to 58.4 from 58.1 and reaching a level not seen in a year. The services PMI index also showed solid growth, rising to a four-month high of 59.1 from 58.5 last month.
Higher new business in the services sector and an improvement in goods production and new orders – a key gauge for demand – especially from international clients, were the primary drivers of the overall positive momentum.
Amid an intensification of capacity pressures, firms continued to hire additional staff across sectors with goods producers recording the highest employment generation since the beginning of the survey in March 2005.
While input cost inflation trends were mixed, accelerating in the manufacturing sector and decelerating in their services counterpart compared to March, robust demand allowed firms to pass higher costs on to clients.