Strong manufacturing growth lifts India’s private sector in February, PMI shows

A worker checks the movement of a hydraulic cylinder before its packaging inside a manufacturing facility on the outskirts of Ahmedabad, India, August 7, 2025. REUTERS/Amit Dave · Reuters

By Anant Chandak

Fri, 20 February 2026 at 2:07 pm GMT+9 2 min read

By Anant Chandak

BENGALURU, Feb 20 (Reuters) - India’s private sector accelerated in February led by robust demand for goods even as services growth ‌was broadly steady, according to a survey that also showed intensifying inflationary ‌pressures.

HSBC’s flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 59.3 in February ​from January’s 58.4 - the strongest in three months and above a Reuters poll median forecast of 59.0. The 50-mark separates expansion from contraction.

The improvement was supported by robust total new orders which rose at the quickest pace since November. Businesses ‌attributed gains to strong demand, ⁠local tourism and marketing efforts. International sales also increased at the fastest pace in five months, bolstering overall demand.

Goods producers reported ⁠a sharper rise in sales, pushing output growth to a four-month high. Services firms, however, saw growth in new business ease to a 13-month low, even as ​they outperformed ​manufacturers on export orders.

While the preliminary headline ​reading for manufacturing PMI rose ‌to 57.5 from 55.4, the services PMI was little changed at 58.4 versus 58.5 in January.

Better sales supported hiring at a faster pace and optimism about year-ahead activity improved to its strongest in a year.

The survey also showed higher price pressures with input costs rising at their fastest rate in 15 months ‌and pushing overall output charge inflation to a ​six-month high. Services firms faced the steepest rise ​in input price inflation in ​two-and-a-half years, while factory input price inflation remained unchanged from ‌January.

That combination of solid growth and ​rising costs, especially for ​services, will keep the Reserve Bank of India cautious as retail inflation rose 2.75% last month, after the statistics ministry updated the consumer price ​index basket and the ‌base year to 2024.

The central bank is expected to hold its ​key policy rate at 5.25% this year, according to a Reuters ​survey.

(Reporting by Anant ChandakEditing by Shri Navaratnam)

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