Archive · 24 Jan 2026
India's Economic Activity Accelerates in January
India's economy is growing faster in January.
Two important numbers, called PMI, went up.
One for making things (manufacturing) and one for services.
This means more businesses are doing well.
But there's a problem: the US has put high taxes (tariffs) on things India sells to them because India bought oil from Russia.
The US Treasury Secretary said that India has stopped buying oil from Russia, which is a good thing.
He thinks the US might remove some of these taxes.
The US President also said that the US and India will make a good deal.
But if they don't make a deal soon, Indian companies might lose out on sales during the summer shopping season.
An economist said that even though things are looking up, they're not as good as they were on average in 2025.
India's manufacturing PMI rose to 56.8 in January from 55 in December.
Services PMI increased to 59.3 from 58, driving the composite index up to 59.5 from 57.8.
Robust domestic demand supported economic growth despite high US tariffs.
US Treasury Secretary Scott Bessent hinted at a potential removal of the 25% tariff on Indian oil purchases from Russia.
Delays in a US trade deal could cost Indian exporters summer orders.
- Who
- India's economic activity, HSBC Holdings Plc, Pranjul Bhandari (HSBC's chief India economist), US Treasury Secretary Scott Bessent, US President Donald Trump, Indian exporters
- What
- India's economic activity accelerated in January, with increases in manufacturing and services PMI, and potential easing of US tariffs on Indian oil purchases from Russia.
- When
- January 2026, with data released on January 23, 2026, and comments made at the Davos 2026 conference.
- Where
- India, Davos, Switzerland
- Why
- Supported by robust domestic demand, despite high US tariffs, and potential removal of the 25% tariff on Russian oil purchases.
Optimistic View
Cautious View
Economic Growth
Optimistic View
The increase in PMI indices indicates strong economic growth driven by domestic demand.
Cautious View
The growth is not as robust as the average seen in 2025, and external factors like US tariffs pose risks.
US Tariffs
Optimistic View
Potential removal of the 25% tariff on Indian oil purchases from Russia could boost economic prospects.
Cautious View
The existing 50% tariffs and delays in a US trade deal threaten India's economic stability and summer orders.
- Manufacturing PMI
- 56.8
- Services PMI
- 59.3
- Composite PMI
- 59.5
- Previous Manufacturing PMI
- 55
- Previous Services PMI
- 58
- Previous Composite PMI
- 57.8
- US Tariff on Indian Shipments
- 50%
- Source of Tariff Concern
- India's purchase of Russian oil
- Potential Tariff Removal
- 25% tariff on Russian oil purchases
- US Treasury Secretary
- Scott Bessent
- US President
- Donald Trump
Sources
India’s economic activity picks pace in January, flash PMI shows
The week in charts: GDP projections, core industry slowdown, India-UAE energy partnership
US sees path to removing India tariff linked to Russian oil, says Scott Bessent
25% India tariff to be removed? Bessent signals good news over ‘collapsed’ Russian oil purchase
