India's private sector rebounded in January after hitting an 11-month low in December 2025, driven by new orders and output, along with a rise in job creation and a rebound in business confidence.
The HSBC Flash India Composite Output Index, including manufacturing and service sectors, grew to 59.5 in January from 57.8 in the preceding month, according to HSBC Flash PMI data released on Friday.
The seasonally adjusted index, which tracks month-on-month output across manufacturing and services, remained comfortably above the 50.0 threshold, indicating expansion.
"There were quicker increases in output at manufacturing companies and their services counterparts, with rates of growth broadly similar," S&P said.
Manufacturing strengthened in January, with the HSBC Flash India Manufacturing PMI rising to 56.8 from 55.0 in December 2025, showing the best improvement in operating conditions since last October. HSBC Flash India Services PMI Business Activity Index also grew to 59.3 in January from 58.0 a month earlier.
"Despite the rise in the manufacturing PMI, January's figure remained below the 2025 average. After losing some momentum at the end of 2025, new orders rose more rapidly - led by a faster pick up in domestic orders," Pranjul Bhandari, Chief India Economist at HSBC said.
"Input cost pressures rose quickly, though more for goods producers than for service providers," Bhandari said.
As per the survey, Indian private sector companies were optimistic as part of the 12-month outlook for business activity. However, the overall level of positive sentiment remained below its long-run average but rose to a three-month high.
