India's economic activity accelerated in February as sentiment improved after the US slashed tariffs on Indian goods, a flash survey by HSBC Holdings Plc showed.
The manufacturing purchasing managers' index rose to 57.5 from 55.4 in January, while the services purchasing managers' index remained flat at 58.4 from 58.5 last month. That pulled the composite index up to 59.3 compared with 58.4 in January.
The indexes reflect business confidence in the economy and are based on preliminary surveys. The data could get revised when final PMI figures are released next month. A reading above 50 indicates expansion in economic activity, while a print below that indicates contraction.
Momentum is expected to accelerate further pace as manufacturing picks up after US President Donald Trump lowered tariffs on Indian goods to 18% from 50% earlier. India has also signed a free trade deal with the European Union, which is yet to be ratified by the parliaments in the bloc.
Latest data showed India's trade deficit widened to $34.68 billion in January from $25.05 billion a month earlier, just weeks before New Delhi agreed to an interim pact with the US to lower tariffs.
The manufacturing industry strengthened in February, supported by robust growth in output and new domestic orders. "That said, growth of new export orders slowed," said Pranjul Bhandari, chief India economist at HSBC in a statement on Friday. While services saw a "notable acceleration in new export business," its domestic orders moderated, she said.
Private sector companies in India saw faster increases in total new orders and international sales in the month, prompting them to recruit additional staff and scale up output, HSBC said. Businesses also became more optimistic about growth prospects.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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