Published 18:02 IST, January 25th 2025
India Records Lowest Business Growth in Last 14 Months at 57.9 in January: PMI
The service sector, a major contributor to Asia's third-largest economy, fell to a significant low of 56.8 this month, its lowest in the last 26 months.

India's business growth is expanding at its slowest pace in the last 14 months in January, according to the latest HSBC Flash PMI data, compiled by S&P Global. The Composite PMI recorded 57.9 in January, the lowest since Nov 2023, down from 59.2 in December. Despite this drop, the PMI index remains in expansion mode, as a number above 50 indicates growth, while below 50 signals contraction.
Manufacturing Strength vs. Service Sector Decline
The service sector, a major contributor to Asia's third-largest economy, fell to a significant low of 56.8 this month, its lowest in the last 26 months. While the manufacturing sector saw remarkable growth, rising to 58 from 56.4 in December—its highest in six months—this was not enough to offset the declining performance of the service sector, which negatively impacted the overall PMI index.
"Indian private sector companies started 2025 with a slowdown in growth. With the rise in new business intakes receding, aggregate output increased at the weakest pace since November 2023," the survey noted.
“India’s manufacturing sector started the year strong, with output and new orders bouncing back from a relatively weak third fiscal quarter. The rise in new export orders was especially noticeable, and the easing of input cost inflation is also good news for manufacturers," Pranjul Bhandari, Chief India Economist at HSBC, said.
Despite the challenges in the services sector, India continues to show resilience and is set to lead the global economy for the next two years, maintaining its status as the fastest-growing large economy.
Outlook for India’s Economy
Despite the challenges in the services sector, India continues to show resilience and is set to lead the global economy for the next two years, maintaining its status as the fastest-growing large economy. According to the Press Information Bureau (PIB), " World Bank’s Global Economic Prospects (GEP) report states that India’s economy is expected to grow at 6.7% in both FY26 and FY27, remaining the fastest-growing large economy globally. This solid growth is set against a backdrop of a global growth forecast of just 2.7% in 2025-26, further highlighting India’s importance on the global economic stage."
The HSBC Flash India Manufacturing PMI Output rose to 60.3 in January, up from 59 in December, highlighting ongoing strength in the sector. "While the cooling growth in new domestic business within services could signal emerging weaknesses, the rise in new export orders for both manufacturing and services points to a continued positive outlook," Bhandari added.
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Updated 14:11 IST, February 3rd 2025