The HSBC Flash India PMI Composite Output Index fell to 57.4 in June from 59.3 in May, indicating a strong expansion in business activity but at the slowest pace since March. Growth eased across both manufacturing and services, with expansion slowing to two-month and 17-month lows, respectively.

New orders continued to rise strongly, although growth slowed to a three-month low. Businesses cited softer demand, competitive pressures, rising fuel prices and gas shortages as factors affecting new business generation. Export performance was mixed, with stronger growth in services offset by the weakest increase in manufacturing exports since March 2023. Overall international sales grew at the slowest pace in 21 months.

Employment increased only marginally, recording the weakest rise in the current six-month growth sequence. Hiring in both manufacturing and services was the slowest since December 2025.

Inflationary pressures eased further. Input cost inflation slowed for the third consecutive month and reached its lowest level since January, despite higher prices for chemicals, food, fuel, gas, metals and utilities. Selling price inflation also softened, with overall charge inflation falling to a six-month low.

Business confidence weakened, with overall optimism falling to its lowest level since January. Manufacturing sentiment dropped to its weakest level in nearly four years.

Meanwhile, the HSBC Flash India Manufacturing PMI declined to 54.5 in June from 55.0 in May, its lowest level in three months.

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