India’s private sector showed strong growth in January 2026, according to the HSBC Flash India Composite Output Index. The composite PMI, which combines both manufacturing and services activity, rose to 59.5 from 57.8 in December 2025. A reading above 50 indicates expansion, so this sharp rise points to robust activity in the country’s private sector.
Both manufacturing and services contributed to this growth. The manufacturing sector saw its PMI increase from 55.0 in December to 56.8 in January, marking the strongest improvement since October 2025. This growth was supported by higher domestic demand, stronger new orders, and increasing hiring. Manufacturers also purchased more raw materials, showing confidence in future business prospects.
Services activity also grew at a similar pace, adding to the overall improvement in the composite PMI. While exact services PMI figures were not provided by Business Standard, the report confirms that services firms experienced increased activity alongside manufacturing.
Several factors drove the growth in January. Domestic demand strengthened, with more businesses reporting higher orders from customers. Export orders also improved, reaching the highest growth in international demand over the past four months. Gains came from Asia, Europe, the Middle East, Latin America, and Australia, reflecting India’s growing global trade presence.
Cost pressures remained moderate. Both input costs and output prices increased slightly from December but stayed under control, indicating inflationary pressures are manageable. Employment trends also improved, with January data showing a return of hiring after a flat December. Most new jobs were created in junior and mid-level positions, reflecting cautious but positive hiring sentiment.
Business confidence rose to a three-month high, supported by stronger demand and marketing efforts. Companies are optimistic about continuing expansion in the coming months, expecting efficiency gains and sustained demand to support growth. Despite this optimism, confidence levels remain slightly below long-term averages, showing that firms are positive but still watchful.
Overall, India’s flash PMI reading of 59.5 in January 2026 signals strong private sector momentum. The combined growth in manufacturing and services suggests broad-based economic expansion as the country enters 2026. Strong domestic demand, rising exports, moderate costs, and improving business sentiment indicate a healthy environment for continued private sector growth.