India's flash PMI falls to 59.9 in October from 61.0 in September

Flash PMI October 2025: New orders placed with private sector companies in India expanded in October, though the pace of growth slowed to its weakest in five months

The HSBC Flash India Composite Output Index, which measures the combined performance of India’s manufacturing and services sectors, fell to 59.9 in October from 61.0 in September, marking its lowest level since May this year, according to data released by S&P Global.

 

This seasonally adjusted index, which tracks month-on-month changes in the combined output of the two sectors, indicated a slower rate of expansion. However, overall growth remained strong, with the index staying well above the neutral mark.

 

A reading above 50 indicates economic expansion, while one below 50 shows contraction in the manufacturing, services, or construction sectors. A reading of exactly 50 signifies no change.

New orders rise, services sector drag

New orders placed with private sector companies in India expanded sharply in October, though the pace of growth slowed to its weakest in five months. The softer increase was driven by a loss of momentum in the service sector, even as goods producers recorded a slightly faster rise than in September. Service providers noted that competition, as well as floods and landslides, constrained sales. 

Flash manufacturing PMI at two-month high

In contrast, the HSBC Flash India Manufacturing PMI rose to a two-month high of 58.4 in October from 57.7 in September. This weighted index, based on new orders, output, employment, suppliers’ delivery times, and stocks of purchases, signalled a notable improvement in manufacturing conditions.

 

Chief India Economist at HSBC, Pranjul Bhandari, said, “The HSBC Flash Manufacturing PMI picked up slightly, likely on the back of GST rate cuts, which are supporting domestic demand and curbing cost pressures. Both new orders and output are above the average January–July levels. However, the drag from US tariffs continues to affect new export orders and future optimism, which remain below the January–July levels.”

Job creation rises moderately

October data showed a moderate increase in private sector employment across India, matching September’s pace and marking the joint-slowest growth since April 2024. Several companies kept payroll numbers unchanged, citing sufficient capacity to meet current demand.

 

International demand for Indian goods and services remained supportive in October, but the upturn was weaker than in September. The rate of growth was the slowest since March, mainly due to a softer rise in the manufacturing sector. While expansion in new export orders among goods producers remained notable, it was the least pronounced since March.

Forward outlook for India Inc

Indian companies remained highly confident about output over the year ahead, although the sentiment index fell slightly from September. Panel members noted some concerns around competitive pressures, market conditions, and demand trends. However, firms expect to benefit from GST rate cuts, marketing initiatives, new product launches, and technology investments.