India’s Economic Activity Slows in September, Flash PMIs Show

India's economic activity experienced a deceleration in September, according to HSBC's flash Purchasing Managers' Index (PMI) survey, following the implementation of US President Donald Trump's 50% tariffs. The composite PMI declined to 61.9 from 63.2 in August, reflecting a broad-based slowdown with manufacturing PMI falling to 58.5 from 59.3 and services PMI dropping to 61.6 from 62.9.

Analysis

India's economic activity experienced a notable slowdown in September, according to flash PMI data from HSBC Holdings Plc. The composite purchasing managers’ index declined to 61.9 from 63.2 in August, reflecting a broad-based loss of momentum. This was driven by declines in both key sectors: the manufacturing PMI fell to 58.5 from 59.3, and the services PMI dropped to 61.6 from 62.9. The survey explicitly attributes this deceleration to the recent implementation of 50% US tariffs, indicating a direct and immediate impact of trade policy on the Indian economy. The data suggests that external trade friction is creating headwinds for what has been strong economic expansion, raising questions about the sustainability of recent growth rates if these tariffs remain in place or are expanded.

Key Decisions for Investors

• Investors should consider the increased macroeconomic risk for assets exposed to the Indian economy, as the September PMI data indicates US tariffs are beginning to impact growth momentum.
• A review of holdings in export-oriented Indian manufacturing and services sectors may be prudent, as these are likely the most vulnerable to the trade policy headwinds highlighted in the survey.
• Closely monitor upcoming Indian economic data and any developments in US-India trade relations to assess if this slowdown is a temporary adjustment or the start of a more pronounced negative trend.