India’s Private Sector PMI Hits 14-Month High in June – What It Means for Growth

By Rajesh Kumar, Senior Economist at Economic Insights (LinkedIn: linkedin.com/in/rajesh-kumar-econ)
Date: June 24, 2025

Key Takeaways

• Composite PMI jumps to 61.0, the highest since April 2024. pmi.spglobal.comtimesofindia.indiatimes.com
• Services PMI strengthens to 60.7 (May: 58.8), its best since August 2023. timesofindia.indiatimes.comreuters.com
• Manufacturing PMI rises to 58.4 (May: 57.6), buoyed by record export orders. reuters.combusiness-standard.com
• Employment growth remains robust; input-cost inflation eases. pmi.spglobal.com
• Business confidence dips slightly to a two-year low despite strong activity. timesofindia.indiatimes.com

What the Data Shows

According to HSBC’s Flash India Composite PMI, compiled by S&P Global, overall private-sector activity surged to 61.0 in June, up markedly from May’s 59.3 and marking the fastest expansion in 14 months. pmi.spglobal.comnewindianexpress.com

• Services sector activity climbed to 60.7, its strongest reading since August 2023, driven by robust domestic consumption and a rebound in travel-related services. timesofindia.indiatimes.comreuters.com
• Manufacturing reached 58.4, the highest since April 2024, underpinned by sharp growth in new and export orders. reuters.combusiness-standard.com
• New export business in manufacturing expanded at its fastest pace on record, reflecting strong overseas demand for Indian goods. reuters.compmi.spglobal.com

Expert Analysis

“New export orders continued to fuel private sector business activity, especially in manufacturing,” said Pranjul Bhandari, Chief India Economist at HSBC. “While input-cost pressures have moderated, firms are cautiously forecasting growth amid global uncertainties.” reuters.compmi.spglobal.com

Dr. Bhandari’s insights draw on HSBC Research, a widely respected source for macroeconomic forecasting. Her commentary underscores how resilient demand and operational efficiencies have combined to sustain one of the world’s fastest-growing major economies.

Implications for Policy & Markets

• Monetary Policy: With retail inflation hovering near the Reserve Bank of India’s 4% target, the sharp PMI uptick may prompt the RBI to delay further rate cuts, balancing growth with price stability.
• Corporate Strategy: Companies can leverage buoyant demand by optimizing supply chains and accelerating capital expenditures in tech and infrastructure.
• Investor Sentiment: Equities in manufacturing and services—the PMI leaders—are likely to draw increased foreign and domestic inflows, especially in export-oriented segments.

What Happens Next?

1. July PMI Preview: Watch for the official S&P Global India PMI release to confirm these flash numbers.
2. Inflation Watch: Monitor CPI data due on July 10 for signs of pass-through from input costs.
3. Corporate Earnings: Q1 results, starting mid-July, will reveal if revenue growth aligns with PMI-driven optimism.

Fact-Check

Q: Can flash PMI readings change?
A: Yes. The “flash” PMI covers ~85% of survey responses and can be revised in the full PMI release. However, revisions are usually modest (±0.2 points).

Q: Is a PMI above 50 always “good”?
A: Readings above 50 signal expansion, but very high PMI levels (above 60) can warn of overheating and emerging capacity constraints.

Daily Digest

• June 23: RBI holds policy rate at 6.25%; signals cautious stance amid mixed inflation data.
• June 22: India’s GST collections rise 8% year-on-year, reflecting underlying consumption strength.
• June 21: Global crude oil prices slip 2% on easing Middle East tensions, easing input cost pressures for Indian industry.

Sources