India’s private sector expanded robustly in February 2026, with the HSBC Flash Composite PMI climbing to 59.3 from January’s 58.4, the strongest in three months and beating forecasts of 59.0.
Manufacturing Leads the Charge
Manufacturing output hit a four-month high as goods producers reported sharper sales growth, driven by new orders surging at the fastest pace since November amid strong domestic demand, tourism, and marketing efforts. The manufacturing PMI rose to 57.5 from 55.4, while services held steady at 58.4 versus 58.5.
Inflation and Optimism Pressures
Input costs escalated at the quickest rate in 15 months, prompting output price hikes to a six-month peak, with services facing the sharpest inflation in 2.5 years. Despite this, hiring quickened, and future business confidence reached a one-year high, fueled by international sales growth.
Economic Implications
HSBC Chief Economist Pranjul Bhandari noted manufacturing’s strength from production and domestic orders, signaling resilience amid global uncertainties. The PMI’s sustained above-50 expansion reinforces India’s growth trajectory, bolstering expectations for continued monetary policy support.
