The HSBC Flash India PMI for February rose to 59.3 from 58.4 in January, indicating the strongest expansion in three months, according to data from S&P Global. This growth was primarily driven by increased factory production, while services activity remained steady compared to the beginning of 2026.
Pranjul Bhandari, Chief India Economist at HSBC, noted that the manufacturing sector saw a boost in February, supported by robust growth in output and new domestic orders. Overall, February’s expansion at the composite level was the most robust since September.
Despite inflationary pressures, both manufacturers and service providers expressed optimism about the future. Private sector companies in India experienced accelerated growth in total new orders and international sales in February, leading to increased hiring and production expansion.
Businesses in India also showed improved optimism towards growth prospects, with rising inflationary pressures impacting input costs and selling charges. The trend of increased new orders was the fastest since November, driven by demand strength, local tourism, marketing efforts, and growing client inquiries.
Goods producers reported a stronger increase in total sales compared to services firms, with the former experiencing the quickest growth in four months. However, competitive pressures and the availability of cheaper services elsewhere dampened this growth trend, particularly for services firms.
The service economy excelled in exports, with international orders rising substantially, marking the sharpest increase since August 2025. In February, goods producers increased their purchasing volumes, with input buying growth reaching a four-month high.
Despite the growth in input buying, suppliers were able to deliver materials promptly, maintaining a two-year trend of improving vendor performance. This allowed firms to enhance their stocks of raw materials and semi-finished items, as highlighted in the report.
