India’s Flash PMI Dips to 61.9 in Sept Despite Signals of Strong Expansion, Manufacturing Outpaces Services

The combined performance of India’s manufacturing and service sectors fell from 63.2 in August to 61.9 in September, the HSBC Flash India Composite Output Index stated on Tuesday. Marking a modest slowdown while indicating a sharp rate of expansion, this reading has been noted as the second-best reading in over two years.

Additionally, the growth in factory output outpaced that of services, although the pace of increase moderated across both sectors.

According to Chief India Economist at HSBC Pranjul Bhandari, "The manufacturing PMI moderated, but its pace of expansion remains healthy. The imposition of the 50 per cent tariff rate by the US on India likely resulted in a slower rise in new export orders over August-September. This comes on the back of strong frontloading of exports to the US since early 2025.”

He further said that the impact of higher tariffs has been offset by lower tax rates in the data so far. “New domestic orders rose for the last two months, likely on the back of announcements of lower goods and services tax (GST) rates,” he added.

In September, the HSBC Flash India Manufacturing PMI slipped to 58.5 from August’s final 59.3. On the other hand, the HSBC Flash India Services PMI fell to 61.6 in September from 62.9 in August 2025. In addition to that, the Manufacturing Output Index decreased to 62.7 from 63.7. However, despite these dips all indices remained well above the neutral 50.0 mark, indicating robust expansion. While a number above 50 shows expansion, a number below 50 shows contraction.

The PMI data from September also showed a continued increase in new business for Indian private sector companies. Many companies reported that demand conditions were favourable, whereas some noted that competitive pressures limited order intake.