New Delhi: India’s private sector continued to expand in September, but growth showed signs of moderation compared to the previous month, according to preliminary Purchasing Managers’ Index (PMI) data.
The flash composite PMI, which combines manufacturing and services activity, fell to 61.9 in September from 63.2 in August. The manufacturing PMI declined to 58.5 from 59.3, while the services activity index dropped to 61.6 from 62.9. Although the numbers remain well above the 50-mark that separates expansion from contraction, the slowdown indicates that the pace of growth is cooling.
New business, including domestic and international orders, continued to rise but at a slower rate. Intense competition among firms has put pressure on order books, while export orders, particularly in the services sector, grew at the weakest pace in six months.
Employment growth also eased, with only around three percent of manufacturers and five percent of service providers reporting payroll increases. Input costs for firms showed signs of easing, but manufacturers sharply raised their selling prices, reaching the highest level in nearly 13 years. Services firms, by contrast, saw a slowdown in charge inflation.
Despite the moderation in growth, business sentiment improved, reaching a seven-month high as companies anticipate stronger demand during the upcoming festive season and expect benefits from recent GST tax cuts. Analysts noted that while domestic demand remains robust, global factors, including U.S. tariffs, continue to pose risks for exports.
Economists suggest that the slowdown may reflect demand saturation in some sectors, caution in hiring, and pressure on margins due to competition. Policymakers will monitor upcoming data on industrial output, employment, and exports to gauge whether the moderation is temporary or signals a broader economic trend.
The preliminary PMI figures suggest that while India’s private sector remains on a growth trajectory, firms face challenges from competitive pressures, export uncertainties, and price adjustments, highlighting the need for careful economic management in the months ahead.