India’s private sector lost some momentum in June as the HSBC Flash Composite PMI slipped to 57.4 from 59.3, the slowest growth since March
Both manufacturing and services cooled, with softer demand, weaker hiring and slower new order growth tempering activity,
Inflation pressures eased and export demand remained broadly resilient
India’s private sector growth moderated in June as softer demand conditions and slower hiring weighed on business activity, according to the HSBC Flash India Purchasing Managers’ Index (PMI) released on Tuesday.
The HSBC Flash India Composite PMI Output Index slipped to 57.4 in June from 59.3 in May. Although the reading remained comfortably above the 50-mark that separates expansion from contraction, it represented the slowest pace of overall growth since March, as per a report by the Business Standard (BS).
1 June 2026
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According to the survey, both manufacturing and services activity expanded at a slower rate during the month. The manufacturing output index edged down to 57.4 from 58.0 in May, while the services business activity index declined to 57.3 from 59.8. The headline manufacturing PMI also eased to 54.5, a three-month low, from 55.0 in the previous month.
New Orders Remain Strong but Growth Moderates
New business continued to increase across the private sector, though the pace of growth weakened to a three-month low. Some firms cited challenges in securing fresh orders, while competitive pressures and rising energy-related costs affected business conditions.
"Private sector activity eased a bit in June. Growth of manufacturing output softened a tad as inventory-building lost steam after a few hectic months," said Pranjul Bhandari, chief India economist at HSBC, as per BS.
"New export orders remained resilient and the order-to-inventory ratio ticked up, pointing at resilient manufacturing activity down the line. Input costs across the private sector rose, but at the slowest pace in five months," he added.
The survey indicated mixed export performance. Services firms recorded stronger international demand, while manufacturers saw the weakest rise in export orders since March 2023. Overall export growth remained positive but slowed to its weakest level in nearly two years.
Hiring and Business Confidence Lose Steam
Employment continued to rise in June but at the slowest pace in six months, as per the survey. Hiring activity among both manufacturers and service providers was the weakest since December 2025, reflecting softer growth in new business.
Meanwhile, inflationary pressures showed signs of easing. Input costs increased due to higher prices of chemicals, food items, fuel, gas, metals and utilities, but the overall rate of cost inflation eased for a third consecutive month and reached its lowest level since January. Companies also raised selling prices more cautiously amid competitive pressures and subdued demand.
Business confidence remained positive regarding future output, but overall optimism fell to its lowest level since January. Sentiment among manufacturers weakened particularly sharply, reaching its lowest point in almost four years, while purchasing activity recorded its slowest growth in two-and-a-half years, the survey said.
