India's February Business Growth Hits 6-Month High: Flash PMI. Here's What Pushed It

The Composite PMI output rose to 60.6 in February, up from 57.7 in January, indicating robust expansion. A reading above 50 signals growth & this improvement was largely driven by the services sector

The strong business expansion is a positive indicator for India's economy, which is navigating global uncertainties

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India's private sector saw its fastest growth in six months in February, fueled by a surge in services activity, according to HSBC's flash India Composite Purchasing Managers' Index (PMI). The survey, conducted by S&P Global, also highlighted record-high job creation, marking a significant milestone for Asia's third-largest economy.

The Composite PMI output rose to 60.6 in February, up from 57.7 in January, indicating robust expansion. A reading above 50 signals growth and this improvement was largely driven by the services sector.

The services sector's PMI jumped to 61.1 in February, the highest since March of the previous year, up from 56.5 in January. This strong performance helped offset a slight dip in the manufacturing PMI, which fell to 57.1 from 57.7, though the manufacturing sector continued to show healthy growth.

The strong business expansion is a positive indicator for India's economy, which is navigating global uncertainties, including potential tariffs from US President Donald Trump that could trigger a wider trade war.

A key driver behind the growth in the services sector was a notable rise in new business orders, which reached a six-month high. While new manufacturing orders also grew, the pace of expansion was slower compared to January. International demand followed a similar trend in both sectors.

Speaking about the report’s findings, Chief India Economist at HSBC Pranjul Bhandari said, “Rapid restocking around the world continues to lift new export orders. A healthy acceleration in orders and output is keeping firms optimistic about the future. Input prices eased while output prices rose at a faster pace, leading to improved margins, especially for goods producers.” 

Employment growth surged to its fastest rate since the survey’s inception in late 2005. Businesses capitalised on increased demand by raising prices, even as input cost pressures eased. For the first time since October, the sub-index measuring output charges exceeded that of input prices, with cost pressures being more significant in the services sector than in manufacturing.

Business confidence for the year ahead also saw an improvement in February, rising from January’s levels and reaching its highest point since November.