India’s private sector activity saw a slight uptick in August. According to the HSBC Flash India PMI data released on Friday, overall output remained robust, driven by an improvement in the services sector and sustained growth in manufacturing. The HSBC Flash India Composite PMI Output Index rose to 54.6 in August from 54.3 in July, signaling expansion within the private sector.
Improvement in Services; Growth Continues in Manufacturing
After recording its slowest growth in 53 months in July, the services sector saw an improvement in business activity and new orders. Manufacturing activity also increased—though the pace of growth slowed slightly—with the HSBC Flash India Manufacturing PMI standing at 52.9. Indian companies received a modest additional rise in new orders, and export orders across the private sector continued to grow rapidly. Companies reported strong demand from markets such as the US, Germany, China, Singapore, and Japan, although the pace of export growth moderated somewhat in both sectors.
Sharpest Rise in Employment
The most positive aspect of the August survey was employment; the pace of job creation in the private sector was the fastest since June 2025, with the services sector playing a key role. Pranjul Bhandari, Chief India Economist at HSBC, noted that robust activity in the services sector kept overall private sector output growth steady. She stated, “Manufacturing growth softened further in August, marking the slowest pace of expansion in five years. While output and new orders did increase, the pace of growth remained subdued.”
Lower Cost Pressures; Higher Selling Prices
Input cost pressures eased in August, with overall cost inflation falling to a seven-month low. However, companies raised selling prices sharply. Inflation in charges reached its highest level since April as firms attempted to pass on increased costs to customers. Business expectations for the year ahead improved compared to July. Sentiment regarding market conditions has improved, and optimism has risen in both the manufacturing and services sectors. Purchasing activity in the manufacturing sector also increased, aligning with higher volumes of new orders. Overall, the data presents a picture of steady expansion in the private sector.
