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India's business activity slowed down in the month of September, as both output and new orders rose at the slowest rates in 2024 so far. However, employment continued to rise solidly amid improved business confidence. Besides, the rates of both input cost and output price inflation were relatively muted, with service providers raising their charges at the slowest pace in just over two-and-a-half years.

The headline HSBC Flash India Composite Output Index -- a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors -- dipped to 59.3 in September from 60.7 in August. Softer expansions were seen across both the manufacturing and services sectors.

The HSBC Flash India Manufacturing PMI -- a single-figure snapshot of factory business conditions calculated from measures of new orders, output, employment, supplier delivery times and stocks of purchases -- posted 56.7 in September, down from 57.5 in August. The reading signaled a further marked strengthening in business conditions for goods producers, but the rate of improvement was the softest since January.

Despite the softer expansions in both output and new orders in September, companies in India remained strongly optimistic that business activity will increase over the coming year. Moreover, confidence strengthened from August and was above the average since the series began in 2012. Firms generally expect to be able to secure new business over the next 12 months, thereby supporting output growth. Sentiment improved in both monitored sectors.