India’s Composite PMI Moderates to 58.4 in January: Sustained Expansion Amid Cooling Momentum

Market snapshot: India's private sector activity started 2026 on a strong footing, though at a slightly slower pace compared to the end of 2025. The HSBC India Composite PMI registered 58.4 in January, a moderate decline from the 59.5 recorded in December. Despite the sequential dip, the reading remains significantly above the 50.0 neutral mark, indicating one of the strongest growth rates globally.

Summary: January's Composite PMI at 58.4 reflects a healthy yet cooling expansion in the Indian economy. While manufacturing remains robust, a slight deceleration in new business intakes compared to December's peak has pulled the headline index down from 59.5.

Key Takeaways

• Growth remains structurally robust, marking over 50 consecutive months of expansion above the 50-point threshold.
• A marginal moderation from 59.5 (Dec) suggests a slight cooling in demand momentum following the festive quarter peak.
• Input cost inflation hit a 4-month high in January, though output price hikes remains modest as firms prioritize market share.
• Employment trends show slight resilience as companies continue to add capacity to meet backlogs.

SAHI Perspective

The moderation to 58.4 is not a cause for alarm; rather, it indicates a normalization of growth following an exceptionally high December. With the Union Budget 2026-27 recently allocating ₹12.2 lakh crore to capital expenditure, we expect infrastructure-linked manufacturing to provide a floor for PMI figures in the coming months. For investors, this stability supports the RBI’s current neutral-to-hawkish stance on interest rates, as demand remains high enough to keep core inflation concerns alive.

Closing Insight

While the momentum has eased from the 59.5 high, India remains the fastest-growing major economy. The PMI's resilience at 58.4 provides a solid fundamental backdrop for Indian equities in Q4 FY26.

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