India’s Private Sector Economy Ends Fiscal Year Strong; Driven By Manufacturing Growth

India’s private sector economy concluded the 2024/25 fiscal year on a strong note, with continued expansions in new business intakes and output, according to preliminary HSBC flash PMI data.

While growth rates softened from February, they remained significantly above long-term averages, indicating a solid economic performance.

The latest data shows that volumes of outstanding business continued to rise, fueling further job creation in the private sector.

Input costs rose significantly, with the pace of increase accelerating.

However, charge inflation, or the price companies charged for their goods and services, slowed to its weakest level in over three years.

This slowdown in charge inflation offers a sign of moderation in price pressures across sectors.

Manufacturing Sector Outperforms Services In March

The manufacturing sector showed the most promising performance in March, with sales and output both growing at a faster rate than the service sector.

The HSBC Flash India Manufacturing PMI rose from 56.3 in February to 57.6 in March, signaling a notable improvement in operating conditions.

Three of the five main sub-components of the PMI, including output, new orders, and stocks of purchases, showed marked improvements since the previous month.

Composite Output Index Remains High

The HSBC Flash India Composite Output Index, which tracks the combined output of India’s manufacturing and service sectors, dropped slightly from 58.8 in February to 58.6 in March.

Despite this small decline, the figure remains significantly above its long-term average of 54.7, indicating a strong rate of expansion.

The slowdown in the composite index was primarily attributed to a softer increase in services activity.

Meanwhile, factory production surged at its fastest pace since July 2024, reinforcing the manufacturing sector’s positive outlook.

Job Creation And Economic Optimism

The increase in outstanding business volumes across both sectors provided a foundation for further job creation in March, continuing the trend of growth in employment seen in recent months.

Despite the mixed price trends, the overall economic outlook remains optimistic, bolstered by the robust performance of India’s manufacturing sector.

In conclusion, India’s private sector remains on solid ground as it enters the new fiscal year, with strong growth in manufacturing and a positive outlook for business activity across both services and industry.

Also Read: Electronics Exports From India To Surpass ₹3 Lakh Crore In FY25