India's flash PMI rises to 59.5 in January against 57.8 in Dec 2025

Flash PMI January 2026: Both manufacturing and services showed similar rates of growth during the month

The HSBC Flash India Composite Output Index, which measures the combined performance of India’s manufacturing and services sectors, rose to 59.5 in January from 57.8 in December, according to data released by S&P Global on Friday.

 

This seasonally adjusted index, which tracks month-on-month changes in the combined output of the two sectors, indicated a slower rate of expansion. Both manufacturing and services showed similar growth rates during the month.

 

Chief India Economist at HSBC Pranjul Bhandari, said: "Growth, as signalled by the HSBC flash PMI, picked up pace for both manufacturing and services. Despite the rise in the manufacturing PMI, January’s figure remained below the 2025 average. After losing some momentum at the end of 2025, new orders rose more rapidly – led by a faster pick up in domestic orders. Input cost pressures rose quickly, though more for goods producers than for service providers." 

Strong demand supports business activity

 

A rise in new business mainly drove faster growth in private sector activity. Companies said they saw better demand from customers and benefited from strong marketing efforts. Manufacturing firms reported a quicker increase in sales compared to service providers, though both sectors saw improvement.

 

Overseas demand also picks up

 

January also saw a clear rise in international orders, the strongest growth in exports in the last four months. Indian companies received more orders from regions such as Asia, Australia, Europe, Latin America, and the Middle East, adding further support to overall business growth.

 

Hiring increases in January

 

Hiring in India’s private sector picked up in January, after staying flat in December. The increase in jobs was small, but it was in line with the usual long-term trend. Companies said they hired to better match their workforce with business needs, mainly adding junior- and mid-level employees.

 

In the manufacturing sector, companies not only hired more people but also spent more on raw materials. Purchases rose faster than in December and showed strong growth overall. Reflecting better conditions, the HSBC Flash India Manufacturing PMI rose to 56.8 in January from 55.0 in December, marking the best improvement in operating conditions since October.

 

Costs and prices rise slightly

 

While costs for inputs and prices charged by companies increased slightly compared to December, overall inflation remained at moderate levels, suggesting that despite faster growth, price pressures are still largely under control.

 

According to the report, companies said they passed on higher costs to customers to protect their profit margins. They reported higher spending on inputs such as food items like eggs, meat, and vegetables, as well as fuel and steel. Labour and transport costs also added to overall expenses.

 

Forward outlook

 

Private sector companies in India remained optimistic, expecting strong growth in the coming months. While confidence levels were still below the long-term average, optimism rose to a three-month high. Businesses said better efficiency, strong demand, and planned spending on marketing were expected to support growth in the coming months.