India’s economic activity picks up pace in January, flash survey shows

[MUMBAI] India’s economic activity picked up pace in January, a flash survey by HSBC Holdings showed.

It was supported by robust domestic demand, despite high US tariffs weighing on the economic outlook.

The manufacturing purchasing managers’ index (PMI) rose to 56.8 from 55 in December, while the services PMI climbed to 59.3 from 58.

That drove the composite index up to 59.5, higher than 57.8 in December.

Steep US tariffs and protracted trade negotiations with Washington threaten the economic prospects for Asia’s third-largest economy, even as it remains one of the fastest-growing major economies in the world.

US President Donald Trump has slapped 50 per cent tariffs on shipments from India, partly over its purchase of Russian oil.

Pranjul Bhandari, chief India economist at HSBC, said: “Despite the rise in the manufacturing PMI, January’s figures remained below the 2025 average.”

Growth in new orders was led by a faster pickup in domestic orders, she noted. 

The indexes, reflecting business confidence in the economy, are based on preliminary surveys.

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The data may be revised when the final PMI figures are released in February. A reading above 50 indicates expansion in economic activity, while a print below that indicates contraction.

Government data released last week showed exports growing for a second straight month in December, despite labour-intensive industries remaining under the strain from high tariffs.

India is still one of the few major economies yet to secure a trade deal with the US, even with months of negotiations. 

Exporters have warned that further delays in securing a deal can cost them orders for the summer shopping season. BLOOMBERG