India’s business activity continued to expand strongly in October, but the pace of growth moderated slightly. The HSBC Flash India Composite Purchasing Managers’ Index (PMI) eased to 59.9 in October from 61.0 in September, indicating that while overall output remains robust, the momentum seen in recent months has softened.
The moderation was led by a slowdown in the services sector, with the services business activity index falling to 58.8 from 60.9 in September. In contrast, manufacturing showed a mild improvement, rising to 58.4 from 57.7, suggesting that factories are still performing well despite external challenges.
New orders continued to rise, though at the slowest pace since May, as demand growth lost some traction. Export orders weakened to a seven-month low amid softer global conditions. Input cost pressures also eased slightly, but many firms continued to raise selling prices to protect margins, pointing to lingering inflationary tendencies.
Business confidence slipped from recent highs, with several firms citing competitive pressures and concerns about future demand. Although the composite PMI remains well above the 50-mark that separates expansion from contraction, the latest figures suggest that India’s private sector is entering a phase of steadier, more moderate growth.
Economists note that the October reading still reflects a healthy level of activity, consistent with strong output and hiring trends. However, the cooling services momentum could temper domestic demand and job creation if it persists.
On the external front, weaker export demand could weigh on manufacturing growth in the months ahead. The moderation in input cost inflation offers some relief for the Reserve Bank of India, though continued price hikes by firms could keep overall inflation sticky.
Overall, the latest flash PMI suggests that India’s economy remains resilient but is beginning to settle into a more measured pace of expansion as global and domestic headwinds gradually build.
