According to the S&P Global-compiled HSBC Flash India Composite Purchasing Managers' Index (PMI), India's private sector expansion reached an eight-month high in April, fueled by strong demand and a significant increase in foreign orders for manufactured goods.

The Composite PMI increased to 60.0 in April from 59.5 in March, indicating the strongest growth in combined manufacturing and services activity since August. A reading above 50 indicates expansion.

The manufacturing sector demonstrated particularly strong momentum, with the PMI rising to 58.4 from 58.1, a one-year high. The services sector also showed strong growth, with the PMI rising to 59.1 from 58.5, the highest level in four months.

"Private sector firms reported a record increase in new export orders in April, with strong demand from Africa, Asia, Europe, the Middle East, and the Americas. Goods producers experienced a faster rate of growth than service providers, the most pronounced in more than 15 years, according to the report.

This growth was primarily driven by increased business in the services sector, as well as a significant increase in goods production and new orders, particularly from international markets. New export orders rose to their highest level since September 2014, primarily benefiting the manufacturing sector, which posted its best performance in over 15 years.

"New export orders increased sharply, likely boosted by the 90-day tariff pause. As a result, output and employment levels increased for both manufacturers and service providers. "Cost inflation was consistent with March levels, but prices charged rose slightly faster, resulting in improved margins," said Pranjul Bhandari, Chief India Economist at HSBC, referring to US President Donald Trump's temporary deferral of broad tariffs announced on April 2.

India's strengthening position as an alternative global manufacturing hub, particularly as China grapples with higher US tariffs, has contributed to the increase in external demand. In response, both manufacturers and service providers increased output and hiring, with manufacturing employment reaching its highest point since March 2005.