Last Updated:July 25, 2025, 13:03 IST
July’s HSBC Flash India Composite Purchasing Managers’ Index, compiled by S&P Global, stands at 60.7, which is well above the 50-level that separates growth from contraction.
India’s strong performance in PMI was bolstered by growth in total sales, export orders, and output levels. (Representative image)
India’s private sector continued to expand at a solid pace in July, backed by strong performance in manufacturing and firm overseas demand, according to the latest HSBC Flash India Composite PMI released by S&P Global.
Manufacturing remained the key growth driver. The HSBC Flash India Manufacturing PMI rose to 59.2 — the highest level in over 17 years — from 58.4 in June.
The HSBC Flash India Composite Purchasing Managers’ Index, compiled by S&P Global, stood at 60.7 in July. Though it is slightly lower than June’s 61.0, but remains well above the 50-mark that separates growth from contraction. With this, the composite PMI remains in expansion mode for four straight years.
“India’s flash composite PMI remained healthy in July at 60.7. The strong performance was bolstered by growth in total sales, export orders, and output levels. Indian manufacturers led the way, recording faster rates of expansion than services for all of the three aforementioned metrics,” said Pranjul Bhandari, Chief India Economist at HSBC.
The survey pointed to a surge in new orders, especially from global clients in Asia, Europe, and the US, with demand for Indian manufactured goods nearing a five-year high. However, despite the upbeat data, firms turned cautious.
“Meanwhile, inflationary pressures continue to heat up as both input costs and output charges rose in July,” Bhandari said.
Input costs and selling prices rose in July, with businesses reporting higher costs for essential materials such as aluminium, cotton, and food items. These cost pressures are now being passed on to consumers, raising concerns over household budgets and the inflation outlook.
While retail inflation eased to a six-year low last month due to cooling food prices, fresh price pressures could limit the Reserve Bank of India’s ability to cut interest rates further to support the economy.
Though manufacturing remained the key growth driver, the services sector saw some cooling, with its index slipping to 59.8 from 60.4, although it still points to strong activity.
Meanwhile, according to a recent Morgan Stanley report, India is on track to become the world’s third-largest economy by 2028 and more than double its GDP to $10.6 trillion by 2035. The report also highlighted the pivotal role that Indian states will play in steering this economic transformation.
Over the next decade, India is expected to contribute 20% to global growth, becoming a major engine for earnings among multinational corporations, the report said.
India has already surpassed Japan to become the world’s fourth-largest economy according to IMF data, NITI Aayog CEO BVR Subrahmanyam announced in May 2025. According to the IMF, India’s GDP is currently $4.187 trillion, overtaking Japan’s $4.186 trillion.
Separately, JP Morgan in its latest report said India has emerged as a relatively safe haven among emerging markets (EMs) amid global trade uncertainties. The report highlighted that India is benefiting from a combination of falling inflation, improved system liquidity, and lower government borrowing, which are expected to support economic growth.
The report adds that India is expected to post the highest GDP growth among countries in JP Morgan’s global universe in 2025. Growth is also being supported by timely demand stimulus and measures that have strengthened urban household balance sheets.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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