India’s private sector hits 8-month high on export boost

India’s private sector activity rose to an eight-month high in April, with the HSBC Composite Output Index hitting 60, driven by strong demand and a surge in export orders, especially in manufacturing. Both manufacturing and services showed robust growth, supported by increased hiring and improved margins.

India’s private sector activity reached an eight-month high in April, driven by strong demand and a notable rise in foreign orders for manufactured goods, according to a survey by HSBC Holdings Plc. The HSBC Flash India Composite Output Index rose from 59.5 in March to 60 in April, signaling the fastest expansion since August 2024. The index, which tracks month-on-month output changes in the manufacturing and services sectors, continued to stay above the 50-mark that separates growth from contraction.

Both manufacturing and services sectors recorded stronger growth, with manufacturing seeing the sharper rise. “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.

The manufacturing index climbed to 58.4 from 58.1, reaching its highest level in a year, while the services PMI rose to a four-month high of 59.1 from 58.5. The uptick in business was primarily driven by increased new orders in both goods and services, especially from international markets, indicating strong underlying demand.

Amid growing capacity pressures, companies continued hiring to meet rising workloads. Goods producers, in particular, saw the highest job creation levels since the survey’s inception in March 2005.

While cost inflation patterns diverged—rising in manufacturing and easing in services—firms managed to pass on the higher costs to clients due to robust demand. “Cost inflation was in line with March levels, but prices charged rose a tad faster, leading to improved margins.”

Overall, April’s performance underscores the resilience of India’s private sector, supported by global demand and ongoing domestic momentum.