India’s private sector activity picks up in April; Composite PMI rises to 58.3

India’s private sector activity gathered momentum at the start of the new financial year, with the HSBC Flash India Composite PMI Output Index rising to 58.3 in April from 57.0 in March, according to data compiled by S&P Global.

The latest reading signalled a sharp expansion in overall business activity and remained well above the long-run average, indicating sustained economic resilience. The rebound follows a moderation in March, when growth was impacted by disruptions linked to the ongoing West Asia conflict.

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The upturn in April was largely driven by the manufacturing sector, which recorded stronger gains in both output and new orders compared to services. The flash manufacturing PMI climbed to 55.9 in April from 53.9 in March, reflecting improved demand conditions and increased production.

The services sector also continued to expand, albeit at a relatively slower pace. The services PMI stood at 57.9, marginally higher than 57.5 in the previous month.

A PMI reading above 50 indicates expansion in activity, while a print below 50 signals contraction.

The acceleration in business activity was supported by a combination of factors, including better demand conditions, rising inflows of new work, capacity expansion and higher investments in technology.

Firms reported stronger growth in new orders, suggesting that demand momentum remained intact despite global uncertainties.

Employment across the private sector rose at the fastest pace in ten months, as companies ramped up hiring to meet increasing business requirements and support expansion plans.

The hiring push also reflected positive business sentiment, with firms expressing optimism about output growth over the next 12 months. This confidence was underpinned by ongoing marketing efforts, a pipeline of pending project approvals and rising client enquiries.

However, overall sentiment eased slightly from March levels, even as it remained the second-highest in nearly 18 months.

Despite the growth momentum, companies continued to face elevated input cost pressures in April. Firms reported higher expenses on fuel, gas, oil and a range of raw materials, including chemicals, food items, jute, leather, metals and rubber. Transportation costs also remained high, with some firms citing gas shortages as a contributing factor.

Although input cost inflation softened from March, it remained the second-highest level seen in nearly three years, highlighting persistent cost-side challenges.

Businesses partially passed on these higher costs to customers by increasing output prices. However, the pace of increase in selling prices remained lower than the rise in input costs, indicating margin pressures for firms.

Overall, the April PMI data points to a strong start to FY27 for India’s private sector, with robust demand, improving output and rising employment. However, elevated cost pressures and global uncertainties—particularly those linked to geopolitical tensions—continue to pose risks to the growth outlook.