India’s HSBC preliminary composite PMI rose to a four-month high of 56.7 in October from 55.9 in September, led by firmer services activity. The services PMI increased to 56.2 from 55.2, while manufacturing eased to 54.9 from 55.1; manufacturing output held up and export orders grew at their fastest pace in six months. The survey data sit alongside the Reserve Bank of India’s upward revision to its FY2026–27 GDP growth forecast to 7.1% from 6.7% earlier this month.
Price Pressures and Monetary Policy
Price pressures moderated, with input-cost inflation at its lowest in almost a year and selling-price increases the weakest since March 2025. That backdrop follows the RBI’s 25bp hike to 5.5% and its shift to a calibrated tightening stance, while leaving open the prospect of further moves depending on oil and food prices as well as credit growth.
Currency and External Dynamics
USD/INR has returned to the lower end of its 94–97 range over the past six months, supported by RBI intervention and steps to curb US dollar demand; elevated oil prices remain a headwind via the import bill and the current account deficit, keeping the pair anchored in the 94–97 band near term.
