Survey Shows Business is Booming in India, Record Export Orders

Activity in India’s private sector surged in June as companies ramped up production to meet surging domestic and international demand.

A survey released on Monday showed record export growth and robust hiring, while talks with Washington continue on the two countries’ efforts to reach a new framework trade deal in the next two weeks.

The economic news at home is positive, with the HSBC Flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, jumping to a 14-month high of 61.0 this month from 59.3 in May. The 50-mark separates growth from contraction and the latest data showed nearly four years of sustained expansion.

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Services gained momentum with the activity index rising to 60.7 from May’s 58.8 – the strongest since August last year – while manufacturing gained pace thanks to robust output. Its PMI climbed to 58.4 in June from 57.6.

“New export orders continued to fuel private sector business activity, especially in manufacturing,” noted Pranjul Bhandari, chief India economist at HSBC.

This expansion was driven by favourable demand as composite new orders grew at the fastest pace in 11 months. Goods producers experienced a more pronounced upturn than services firms.

Robust global demand

International sales saw a remarkable rise, with overall new export business at the highest since the data started to be collected in September 2014. However, service providers recorded slower growth in export business compared to last month.

“The combination of robust global demand and rising backlogs prompted manufacturers to increase hiring,” added Bhandari.

Manufacturing employment growth reached a peak not seen since the series began over two decades ago. Service providers also continued adding jobs at a solid pace, albeit slower than in May.

Meanwhile, overall price pressures eased slightly with input cost inflation softening to a 10-month low, allowing firms to limit price hikes to remain competitive. That resulted in a slower rate of output price rises from May’s six-month high.

That comes after data showed inflation eased to an over 6-year low in May, allowing the Reserve Bank of India to focus on supporting economic growth and cutting interest rates amid rising uncertainty from US trade tariffs.

Despite positive private sector performance, business confidence dipped to its lowest in just over two years. Manufacturers expressed slightly improved optimism while service providers tempered their expectations for the coming year.

Trade talks in US soon

Protecting India’s interest remains “supreme” in bilateral trade talks with the United States, a senior Indian trade ministry source said on Monday, as New Delhi pushes to finalise a deal before the expiry of the pause on steep reciprocal tariffs imposed by US President Donald Trump.

India is resisting US demands to open its markets for wheat, dairy and corn imports, while offering lower tariffs on high-value US products such as almonds, pistachios and walnuts.

An Indian delegation will travel to Washington soon for further negotiations, with the aim of signing an interim deal that could include tariff cuts and enhanced market access for key products from both sides, another trade ministry official told reporters.

“The dates for the visit are being finalised,” the official said, adding India is keen to conclude a limited deal ahead of the July 9 deadline. However, the official also cautioned that progress hinges on the offers made by both sides.

“For us, in every trade negotiation including with the US, national interest is supreme,” the trade ministry source said.

India has asked the US to revoke its 10% base tariff and consider steel tariff cuts as part of an interim deal, while offering to address non-tariff barriers and customs rules in the first phase of a broader trade pact likely by autumn of 2025, sources said.

Trump and Indian Prime Minister Narendra Modi had agreed in February to conclude a bilateral trade agreement by autumn 2025 and to more than double bilateral trade to $500 billion by 2030.

“The outcome of talks depends on what is offered by both sides,” the Indian official said, when asked about the possibility of the deal not materialising by Trump’s July 9 deadline.