India’s private sector activity rebounds in January as HSBC flash PMI rises to 59.5

India’s private sector showed stronger momentum in January 2026, according to a flash PMI reading that indicated faster growth across both manufacturing and services. The HSBC Flash India Composite Output Index rose to 59.5 in January from 57.8 in December 2025, suggesting that activity bounced back after losing some pace at the end of the previous year. The survey pointed to quicker expansion in new orders and output, alongside an improvement in business sentiment. Hiring also picked up after being flat in December, while cost pressures increased: input prices rose at their fastest rate in four months, a signal that demand strength may be feeding into firmer pricing in parts of the economy. Beyond headline growth, the details are important for markets and policymakers. A sustained uptick in new orders often precedes a longer run of output gains, but faster input inflation can test margins—especially for smaller firms—unless companies can pass costs on to customers. The survey commentary also indicated that some firms cited efficiency gains, marketing spend and favourable exchange rates as tailwinds, suggesting corporate planning remains constructive even as global conditions stay uncertain. For Indian businesses, the PMI rebound is a near-term positive signal: demand is holding, capacity use is improving, and labour additions are resuming. The next question will be whether cost pressures ease or intensify as the quarter progresses, and whether the improvement is broad-based across regions and sectors.

Key takeaways from the flash PMI

• Composite output index: 59.5 in January vs 57.8 in December 2025.
• Demand: new orders and output accelerated.
• Jobs: hiring resumed after a flat December.
• Costs: input price inflation rose to a four-month high in the survey.

A PMI rebound can lift confidence quickly, but the durability of the recovery often depends on whether demand growth stays ahead of input-cost pressures.