India Private Sector PMI Climbs Four-Month High on Manufacturing Surge

India’s private sector activity accelerated sharply in February 2026, propelled by a robust manufacturing surge despite moderate services growth. The HSBC Flash PMI composite output index climbed to 57.5 from January’s 55.0, marking the strongest expansion in four months and signaling sustained economic momentum. Manufacturing PMI hit a four-month high of 58.2, driven by the fastest new order inflows since November 2025, fueled by buoyant domestic demand from tourism recovery, aggressive marketing campaigns, and a five-month peak in international sales.​

Output across the private sector expanded at its briskest pace in four months, with manufacturers leading the charge through sharp sales increases that outpaced services, which recorded their lowest new business growth in 13 months—though exports still tilted toward services. Firms ramped up hiring at the quickest rate in six months to meet demand, while business confidence soared to a yearly peak, underpinned by expectations of continued client spending and capacity investments.​

However, inflationary pressures intensified, with input costs rising at the fastest clip in 15 months due to higher raw material, fuel, and wage expenses, particularly burdensome for services providers. Output charges followed suit, reaching a 10-month high as companies passed on costs, though manufacturing margins held firmer. Retail inflation stood at a mild 2.75% last month, prompting the Reserve Bank of India (RBI) to remain cautious, likely maintaining policy rates at 6.25% through 2026 amid balanced growth risks.​

This PMI uptick reflects India’s resilience amid global uncertainties, with manufacturing acting as a key growth engine. Strong domestic and export demand sustains optimism, even as cost pressures test profitability. Policymakers eye steady reforms to bolster supply chains and ease inflation, positioning India for sub-7% GDP growth this fiscal year. Overall, February’s data underscores a vibrant private sector poised for further acceleration.