Growth in India’s private sector has eased to a five-month low in October, weighed by weaker demand and rising output prices, showed a survey, the results of which were released on Friday.
HSBC’s flash India Composite Purchasing Managers’ Index (PMI), which is compiled by S&P Global, fell to 59.9 this month from 61.0 in September, the survey showed.
October’s reading is also below a Reuters poll media forecast of 61.2.
But, despite plummeting to the lowest figure since May, 2025, growth in the country remained robust and well above the 50-mark, keeping expansion separate from contraction.
HSBC’s PMI is a seasonally-adjusted index measuring the month-on-month change in the combined output of India’s manufacturing and service sectors. The overall index was dragged in October by a slowdown in services growth, even as manufacturing activity recovered from a four-month low in September.
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Last month, the flash manufacturing PMI had risen from 57.7 to 58.4, while the services business activity index had slipped from 60.9 to 58.8. The softer increase in the pace of an overall new orders sub-index since May stems from a loss of growth momentum in the services sector.
However, goods producers saw a slightly quicker rise than in September.
International demand for Indian goods and services softened to its weakest in seven months, largely due to a slower increase in manufacturing exports as the country braced for a steep US tariffs on its goods from August-end after US President Donald Trump slapped 50 per cent tariff on Indian products. Trump said the tariffs will remain high unless New Delhi stopped its purchase of Russian crude oil.
The Reserve Bank of India’s (RBI) monthly bulletin in October also noted merchandise trade to have remained resilient overall, but highlighted a sharp decline in exports to the US in September as the high tariffs kicked in.
The silver lining was the ease in Goods and Services Tax (GST) on numerous products after the Centre’s GST rejig, which led to cost pressures easing across both sectors. It has also come to be noticed, however, that firms refrained from passing those benefits on to customers, and selling charges were raised to offset higher operational costs.
There has been observed a dimming of business optimism for the year-ahead, triggered by concerns over rising competitive pressures, market conditions, and demand trends.
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