NEW DELHI, July 24, 2026 — Growth across India’s private sector slowed sharply in July as weaker services demand outweighed comparatively resilient factory production, preliminary survey results showed Friday.
The HSBC Flash India Composite PMI, compiled by S&P Global, declined to 54.3 from 57.1 in June. It was the lowest reading since March 2022, although it remained above 50—the level separating expansion from contraction.
Services accounted for most of the slowdown. The Services Business Activity Index fell to 53.1 from 57.4, its weakest level in 53 months. Businesses reported tougher market conditions, fewer customer enquiries, greater competition and order cancellations.
Manufacturing presented a mixed picture. The headline Manufacturing PMI edged down to 53.9 from 54.2, but its output component increased to 57.0 from 56.3, indicating faster production even as broader factory conditions softened slightly.
International demand provided some support. Export orders across manufacturing and services increased at their strongest combined rate since March, with factories reporting the larger improvement.
Cost pressures also intensified as companies paid more for fuel, transportation, labour and materials. Businesses raised selling prices more quickly to protect margins. Employment increased for a seventh consecutive month, although overall hiring remained modest, and business confidence slipped to a six-month low.
The flash results are based on approximately 90% of the survey responses normally used for the final monthly report. Consequently, the completed figures may differ slightly.
Why it matters: India’s private sector is still expanding, but the loss of momentum in services and rising operating costs could weigh on near-term economic growth and inflation.
