According to the latest HSBC Flash PMI, India’s private sector activity rose to 61.0 in June—up from 59.3 in May—marking the fastest expansion in 14 months. Both manufacturing (58.4) and services (60.7) saw strong growth, fueled by robust domestic demand and record-breaking export orders, the highest since 2014. This growth spurred hiring, with manufacturing jobs climbing to their highest in twenty years, while input cost inflation eased to a ten-month low, relieving pressure on prices.
This upbeat PMI gives the RBI room to maintain a neutral policy stance, even after its 50 bps rate cut, since input costs are under control. While business confidence showed a subtle dip—mostly in services—this is offset by widespread optimism among manufacturers. Continued momentum in exports and cooling inflation could pave the way for further rate cuts later in 2025, potentially benefiting borrowers and business expansion.
