India’s private sector activity rebounds in January as demand strengthens: survey

India’s private sector activity picked up in January, helped by stronger demand and an improvement in new business inflows, according to a private survey cited in recent reports. The HSBC Flash Composite Output Index rose to 59.5 in January from 57.8 in December, when it had touched an 11-month low.

Survey-based indices are watched closely because they offer a high-frequency snapshot of how businesses are performing before official data is published. A reading above 50 indicates expansion, and the January level suggests activity remained firmly in growth territory even as conditions were described as uneven across sectors.

Reports said the rebound was driven by quicker growth in new orders and output, with both manufacturing and services registering faster expansion compared with the previous month. Business confidence also improved, with sentiment rising to a three-month high, reflecting expectations of sustained demand and continued momentum.

Hiring reportedly returned after a softer patch, signalling that firms are beginning to add capacity again as workloads increase. However, the survey also pointed to a renewed rise in costs: input prices accelerated at the fastest pace in four months, a key watchpoint for companies’ margins and for the inflation outlook.

While output and orders strengthened, businesses in such surveys often flag supply chain issues, wage pressures and commodity volatility as ongoing risks. For policy watchers, a combination of stronger activity and rising cost pressures can complicate the balance between supporting growth and containing inflation.

Overall, the January survey reading suggests the economy entered 2026 with improved private-sector momentum compared with December, though the trajectory will depend on how demand holds up and whether cost pressures remain manageable in the weeks ahead.