New Delhi, June 23, 2025 — India’s private sector economic activity jumped to a 14-month high in June, led by strong expansion in both the manufacturing and services sectors, according to preliminary data from HSBC’s Flash India Composite Purchasing Managers' Index (PMI).

The Composite PMI rose to 61.0, up from 59.3 in May, indicating the sharpest pace of expansion in over a year. A score above 50 signals growth, while below 50 denotes contraction.

This surge highlights India’s economic resilience despite a challenging global backdrop, including persistent geopolitical tensions and a temporarily disrupted trade environment earlier in the quarter.

Sectors Driving Growth: Manufacturing and Services

Both major sectors of the Indian economy contributed to the robust June reading:

• The manufacturing sector saw continued order inflows, increased production, and robust export demand, fueled by stabilizing global supply chains.

• The services sector, which makes up over 50% of India’s GDP, saw improved consumer demand, particularly in financial services, IT, and hospitality, following a steady moderation in inflation.

Pranjul Bhandari, Chief India Economist at HSBC, noted:

"June’s PMI readings suggest that Indian businesses are bouncing back from recent global shocks. Output growth remains solid, new orders are expanding, and employment is also picking up in key sectors."

Backdrop: Navigating Geopolitical Uncertainty

June's data comes against a backdrop of three months of global geopolitical pressures. These began in early April when US President Donald Trump imposed new tariffs that affected emerging markets, including India. Though the tariffs were later paused, the uncertainty weighed on trade and investor sentiment globally.

Despite these hurdles, India’s domestic demand and relative insulation from global supply chain risks enabled a quick bounce-back. The resilient performance has boosted confidence among investors and policymakers alike.

Implications for the Indian Economy

A strong PMI print often precedes broader economic growth trends and may influence:

• RBI’s monetary policy stance — stronger growth might delay rate cuts if inflation risks re-emerge.

• Foreign investor sentiment — robust economic activity can attract capital flows, particularly in equities and bonds.

• Employment trends — rising demand in services and manufacturing typically leads to job creation, especially in urban centers.

Global Comparison: India Leads Among Emerging Markets

While many Asian and emerging market economies struggled in Q2 2025 with weakening PMIs due to volatile oil prices and regional tensions, India has emerged as a bright spot. Its domestic consumption-led economy has been more insulated from export shocks compared to peers.

India’s PMI outpaces recent data from:

• China – where manufacturing showed contraction signs

• Indonesia & Vietnam – which reported weak external demand

• Brazil & South Africa – where interest rate hikes dampened activity

What to Watch Next

Economists and investors will be closely watching:

• The final HSBC PMI data for June, expected in early July

• India’s Q1 FY26 GDP figures scheduled for release in late July

• Monetary Policy Committee (MPC) meeting minutes in July to gauge policy stance

With monsoon season in progress and upcoming festive demand cycles, the second half of 2025 could further consolidate India’s post-pandemic economic recovery.

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