India’s Private Sector Shows Acceleration in August Performance

India's private sector registered record-breaking growth in August, driven by a surge in new orders and strong demand, a recent report said.

The HSBC Flash India Composite Output Index rose to 65.2 in August from 61.1 in July, the report added. The index measures joint activity in both the manufacturing and services sectors.

The August figures mark the highest rate of growth since the survey was started in December 2005. HSBC pointed out that India's private sector recorded its highest growth on record in the month, as one of the biggest increases in sales volumes ever seen was supported by robust domestic and overseas demand.

The report highlighted that great volumes of new work coming from areas such as Asia, the Middle East, Europe, and America helped fuel this acceleration.

On the manufacturing side, the HSBC Flash India Manufacturing PMI rose to 59.8 in August from 59.1 in July, the highest since January 2008. The index of new orders, output, employment, supplier delivery times, and inventories signaled a sharper pick-up in factory conditions.

In contrast, HSBC Flash India Services PMI Business Activity Index shot up to a record 65.6, much above July's 60.5, reflecting a very fast growth in the services sector.

"The Services flash PMI reached an all-time high of 65.6, powered by a steep pick-up in new domestic and export orders. The Manufacturing flash PMI increased further, nearing the 60-mark, powered by a discerning increase in new domestic orders," HSBC Chief India Economist Pranjul Bhandari said.

Though growth in export orders was stable at the July level, margins were better as output prices rose more than input costs, Bhandari further added.

The robust PMI readings come at a time when India seeks to accelerate its path to a $10 trillion economy in the next few decades. The growth plan of the country now shifts more toward the development of manufacturing capabilities, with priority sectors like semiconductors, electronics, EVs, renewables, and defence becoming the big drivers of growth, the report said.