India’s private sector kicks off FY26 strong: HSBC Flash PMI

New Delhi: India’s private sector kicked off FY26 on a strong note, buoyed by robust global demand for goods and services, according to HSBC’s flash Purchasing Managers’ Index (PMI) survey released Wednesday.

Export orders surged at their fastest pace since the survey began in September 2014, propelling faster growth in both output and employment.

The HSBC Flash India Composite Output Index—which tracks activity across manufacturing and services—is expected to rise to 60 in April, up from 59.5 in March. A reading above 50 indicates expansion; the index has now remained in growth territory for over three years.

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Services activity is also set to accelerate, with the HSBC Flash India Services PMI Business Activity Index rising to 59.1 in April from 58.5 in the previous month. Manufacturing, meanwhile, remains resilient. The Flash India Manufacturing PMI Output Index is seen inching up to 61.9 in April from 61.7 in March, while the broader Manufacturing PMI is expected to rise to 58.4 from 58.1.

Final PMI data for April will be released early next month.

"New export orders accelerated sharply, likely buoyed by the 90-day pause in implementation of tariffs. As a result, output and employment grew, for both, manufacturers and service providers," said Pranjul Bhandari, chief India economist at HSBC.

"Cost inflation was in line with March levels, but prices charged rose a tad faster, leading to improved margins," Bhandari added.

The flash PMI data, compiled by S&P Global, is based on responses from around 400 manufacturers and 400 service providers.

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In April, firms reported a record jump in export orders, with demand strengthening across Africa, Asia, Europe, West Asia, and the Americas. Goods producers led the charge, recording their fastest pace of growth in more than 15 years.

"Aggregate sales increased at a sharp pace that was the fastest since August 2024. Once again, manufacturing companies registered a quicker upturn in new business than their services counterparts," the survey said. “There were quicker increases in backlogs across both the manufacturing and services economies.”

India’s push to become a $10 trillion economy over the next decade is being powered by manufacturing, especially in sectors such as semiconductors, electronics, electric vehicles, renewables, and defence. To support this ambition, the government has ramped up capital spending on infrastructure, job creation, and industrial development.

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The latest HSBC flash PMI survey showed that companies scaled up input purchases to rebuild stocks and safeguard against shortages.

"Holdings of raw materials and semi-finished items rose at the fastest pace in eight months, underpinned by shorter lead times for inputs, but postproduction inventories dropped to the greatest extent in nearly three-and-a-half years as orders were often fulfilled from warehouses," it added.