India’s Business Growth Surges to a Four-Month High: Why Are Hiring Plans Stalling?

India’s private-sector business activity accelerated in October 2026, reaching its strongest pace in four months, according to a preliminary business survey reported on October 23. The HSBC Flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, increased to 56.7 from 55.9 in September. A reading above 50 indicates expansion, suggesting that business activity continued to grow.

The services sector was a major contributor to the improvement, with its PMI rising to 56.2 from 55.2. Manufacturing output also increased, although the manufacturing PMI eased slightly to 54.9. Stronger orders helped businesses maintain momentum, while international demand provided additional support to export-oriented companies.

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Despite the stronger activity, employment growth almost stalled during the month. Survey findings indicated that companies were handling workloads with their existing staff rather than expanding their teams. This suggests that rising business demand has not yet translated into an equally strong increase in recruitment.

There were some encouraging signs on costs, as input-cost inflation eased and increases in selling prices weakened. Business confidence also improved compared with the previous month, although it remained below the average recorded earlier in the year. The coming months will show whether stronger orders lead to more hiring and sustained growth across India’s private sector.

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