India’s private sector activity surged in June 2025, supported by rising domestic and international demand. According to the latest HSBC Flash India Composite Purchasing Managers’ Index (PMI), economic expansion has accelerated across services and manufacturing, underscoring India’s resilient growth trajectory despite a dip in business confidence.

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Key Performance Indicators – June 2025

Metric	June 2025 Value	May 2025 Value	Comment
Composite PMI (HSBC Flash)	61.0	59.3	Highest since April 2024; indicates robust expansion
Services Activity Index	60.7	58.8	Best performance since August 2024
Manufacturing PMI	58.4	57.6	Boosted by record export orders and solid output
New Export Orders (Manufacturing)	—	—	Highest since data collection began in Sept 2014
Manufacturing Job Creation	—	—	Reached a 20-year high
Input Cost Inflation	—	—	Eased to 10-month low, easing pricing pressures
Output Price Inflation	—	—	Slowed due to stable input costs
India’s Headline Inflation	—	—	Eased to 6-year low in May
Business Confidence Index	—	—	Dipped to 2-year low despite robust activity

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Economic Highlights

✅ 1. Accelerated Growth Across Sectors

India’s Composite PMI reaching 61.0, a 14-month high, reflects continued expansion above the benchmark 50-point level. The services sector led the way, showing the strongest growth in nearly a year, while manufacturing maintained upward momentum with record export order growth.

✅ 2. Job Creation Breakthrough

The manufacturing sector saw the highest job creation in two decades, indicating expanding capacity and confidence in long-term demand. Service providers also increased hiring, though at a slower pace.

✅ 3. Easing Inflation Boosts Growth Outlook

With input costs and output inflation softening, firms were able to limit price hikes. The overall inflation rate in May hit a six-year low, giving the Reserve Bank of India (RBI) room to maneuver — possibly even toward interest rate cuts to sustain momentum.

⚠️ 4. Business Confidence Slips

Despite these gains, business sentiment dipped to its lowest in two years, hinting at caution around global headwinds, geopolitical uncertainties, and regulatory shifts. While manufacturers remain relatively more optimistic, service sector outlooks are subdued.

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Future Outlook – PMI Projections and Influencing Factors

Factor	Expected Impact on PMI	Commentary
Sustained Growth Momentum	Positive	Current PMI suggests continued demand across sectors
Global Demand Trends	Positive	Record export orders show resilience; may extend if global growth holds
Domestic Consumption & Policies	Positive	Consumer spending and government capex could further boost activity
Inflation and Monetary Policy	Positive	RBI may reduce rates, encouraging more borrowing and business investment
Business Confidence	Neutral/Negative	Needs improvement to ensure long-term capex and hiring
Employment Expansion	Positive	Strong job market fuels productivity and consumer demand
Sectoral Trends	Mixed	Services need to sustain growth alongside manufacturing for holistic gains

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Conclusion

India’s private sector continues to display robust economic resilience, led by record export growth, a strong labour market, and easing inflation. While the composite PMI at 61.0 is a positive signal for near-term expansion, cautious business sentiment remains a key variable to watch. Strategic policy moves by the RBI and government, especially around interest rates, infrastructure, and MSME support, will be instrumental in maintaining this upward trajectory.

As the country aims to position itself as a global manufacturing and services powerhouse, balancing optimism with preparedness for external risks will be vital.