India's private sector activity lost some momentum in December, expanding at its slowest rate in ten months, according to the latest Purchasing Managers' Index (PMI) survey data. The figures, released on 16 December 2025, also indicate a significant stall in hiring activity across the sector.
Key Indicators Point to a Moderation
The data suggests that while growth in the world's third-largest economy remains on a solid footing, it is showing signs of cooling off. This deceleration follows the impressive 8.2 per cent growth reported for the latest quarter. The composite PMI, which measures combined activity in both the manufacturing and services sectors, dipped to a level not seen since February 2025.
One of the most notable findings from the survey is the near-stagnation in employment. Companies appeared hesitant to add new staff in December, reflecting a cautious approach amidst the easing growth momentum. This hiring pause marks a shift from the more robust job creation trends observed in previous months.
Inflation Outlook Remains Subdued
Alongside the growth figures, the PMI data reinforces a broader consensus among economists that inflationary pressures in India remain weak. Input cost increases were reportedly modest, allowing firms to maintain stable output prices. This environment provides the Reserve Bank of India with continued flexibility in its monetary policy stance.
The slowdown is not entirely unexpected, given the high base of comparison from earlier in the year and global economic headwinds. Analysts view this as a normalization from an exceptionally strong phase of growth rather than the start of a sharp downturn.
What This Means for the Economy
The December PMI readings paint a picture of an economy that is still growing robustly but entering a phase of moderation. The stall in hiring will be watched closely as an indicator of business confidence. However, the weak inflationary signals are a positive takeaway, suggesting that the growth moderation is not accompanied by rising price pressures.
Economists will be monitoring the next few months of data to determine if this is a temporary soft patch or the beginning of a more sustained slowdown. For now, the underlying fundamentals of the Indian economy are viewed as strong, with the PMI data indicating expansion, albeit at a more measured pace.
