India Business Growth Hits Four-Month High
Stronger orders and services activity lifted private-sector growth in October, while hiring nearly stalled and inflationary pressures eased.
India’s private-sector business activity expanded at its fastest pace in four months in October 2026, supported by stronger new orders and improving demand, according to a preliminary survey released on Friday. However, employment growth nearly stalled as companies relied on existing staff to handle rising workloads.
The HSBC Flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 56.7 in October from 55.9 in September. The reading exceeded the median forecast of 56.1 in a Reuters poll. A PMI reading above 50 indicates expansion in business activity.
The services sector led the acceleration. Its PMI increased to 56.2 from 55.2 in September, reflecting stronger business activity and improved order flows. Manufacturing output also edged higher, although the headline manufacturing PMI slipped to 54.9 from 55.1, partly reflecting weaker employment growth.
Despite stronger activity, employment across the private sector was almost unchanged. Services companies reported no net increase in staffing, ending a nine-month hiring streak, while manufacturing firms added workers only marginally. Businesses indicated that existing staff levels were sufficient to manage current workloads.
Outstanding business backlogs declined at the joint-fastest pace in nearly six-and-a-half years. The reduction suggests that companies were processing accumulated work more quickly even as new orders supported continued expansion.
Export demand provided additional support, with overall new export orders rising at their fastest pace in six months. The improvement was concentrated among goods producers, while growth in foreign demand for services weakened.
The survey also showed a moderation in price pressures. Input-cost inflation eased to its lowest level in almost a year, while increases in selling prices were the weakest since March 2025. The easing could provide some relief to businesses facing operating-cost pressures.
Business confidence recovered to its highest level since May, although it remained below the average recorded so far in 2026. The October data point to resilient demand and improving activity, but the slowdown in recruitment highlights a gap between business expansion and job creation.