India’s Private Sector Expansion Cools as Manufacturing Slows in November

India’s private sector saw its slowest growth in six months in November 2025. The manufacturing sector showed a clear loss of momentum. Even though services continued to grow, the early readings from important economic activity indices indicate a slowdown in overall business growth. 

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Composite PMI Falls to 6-Month Low 

The HSBC Flash India Composite Purchasing Managers’ Index (PMI), put together by S&P Global, fell to 59.9 in November, down from 60.4 in October. This is the lowest reading since June and shows a third month in a row of slowing growth. A PMI above 50 signals expansion, while below 50 shows contraction; however, this month, the speed of expansion decreased significantly. 

Manufacturing Weakens Significantly 

The manufacturing sector saw the biggest decline, with the flash Manufacturing PMI falling to a nine-month low of 57.4 in November, down from October’s 59.2. Factory output increased at its slowest rate since May, showing less demand for goods at home and abroad. Survey participants pointed to weaker new orders and increased pricing competition from foreign markets as key reasons for this slowdown. Additionally, heavy rainfall caused disruptions in some regions, further affecting production levels. 

Services Sector Offers Modest Support 

Contrasting the manufacturing dip, the services sector maintained resilience. The Services PMI edged up to 59.5 in November from 58.9 in October, underpinned by a modest rebound in service activity and incremental growth in new orders. However, the upturn in services was not enough to offset the broader slowdown caused by weaker manufacturing numbers. 

Export Orders, Hiring, and Cost Trends 

New export orders within the private sector grew at their slowest rate since March, hindered in part by punitive foreign tariffs and softening international demand, including a nearly 9% year-on-year decline in shipments to the US. This environment has prompted the Indian government to introduce measures worth more than $5 billion, offering credit guarantees and loans to support exporters amid softer trade flows. 

On the employment front, job creation slowed to its weakest in over 18 months, reflecting reduced growth expectations and lighter workloads. Meanwhile, inflationary pressures eased: input prices rose at the slowest pace in over five years, and output inflation touched an eight-month low in November. These trends suggest continued weakening in price pressures across the economy. 

Outlook: Slower Growth, Policy Implications 

Although the overall PMI remains comfortably above the expansion threshold, the moderation in both manufacturing and the broader composite index points to a loss in economic impetus heading into the year’s final quarter. The Reserve Bank of India projects GDP growth to cool further in the coming quarters. 

With easing inflation and weaker growth trends, expectations for a shift in monetary policy have risen, with markets anticipating a possible reduction in the key repo rate in the near term.