India’s private sector activity gathered fresh momentum in February, with the latest Purchasing Managers’ Index (PMI) data indicating the strongest expansion in the past three months. The surge highlights improving business conditions, supported by robust demand, rising new orders, and resilient manufacturing output.

Key Highlights

• India’s February PMI hits three-month high, signaling robust manufacturing, services growth and strengthening business confidence nationwide.
• Strong domestic demand, rising output, and improved hiring trends reflect accelerating economic momentum across key sectors.

According to the flash survey compiled by S&P Global for HSBC, the Composite PMI climbed to 59.3 in February, up from 58.4 in January, comfortably staying above the 50-mark that separates growth from contraction. This improvement was largely driven by strong manufacturing performance, which offset relatively stable growth in the services sector.

Manufacturing activity accelerated sharply, with the Manufacturing PMI rising to a four-month high, reflecting increased production volumes and faster inflows of new business. New orders across the private sector grew at their quickest pace since November, underpinned by strong domestic demand, rising consumer spending, and improved client confidence. Export orders also strengthened, registering their fastest growth since September 2025.

Meanwhile, the services sector maintained steady momentum, supported by continued demand from domestic markets, tourism, and expanding business activities. Companies reported increased marketing efforts and higher customer enquiries, contributing to sustained expansion.

Also Read: India's Service Sector Growth Hits Two-Month High in January PMI

However, the upbeat data also revealed mounting inflationary pressures. Input costs rose at a faster pace, driven by higher raw material prices and wage expenses, prompting firms to partially pass on these costs to customers. Despite this, business sentiment remained optimistic, with companies expressing confidence in near-term growth prospects.

Overall, February’s PMI figures suggest that India’s economy continues to demonstrate resilience, supported by solid domestic demand and improving manufacturing conditions. Analysts view this sustained momentum as a positive signal for economic expansion in the coming quarters, even as inflation and global uncertainties remain key factors to monitor.