The manufacturing sector rebounded from a four-month low in September, with the PMI rising to 58.4, signaling steady production activity and continued industrial expansion. Meanwhile, the services sector, while experiencing a moderate slowdown, still maintained a healthy growth pace at 58.8, indicating that domestic demand and business activity remain strong and supportive of overall economic performance.

New orders expanded firmly, highlighting that companies continue to receive strong demand for goods and services. Although growth momentum was slightly softer in the services sector, manufacturers saw an improved pace in output, reflecting the sector’s adaptability and ability to capitalize on market opportunities. This balance supports sustained private sector confidence and operational stability.

International demand for Indian goods and services has remained resilient, with exporters actively exploring new markets and diversifying their customer base. Strategic adjustments and innovative solutions by businesses are helping mitigate the impact of global trade challenges, including tariffs, while maintaining a positive trajectory for long-term growth.

Cost pressures eased across both manufacturing and services sectors, aided by reductions in the goods and services tax. Companies have efficiently managed operational costs while maintaining strong output, demonstrating effective business planning and adaptability in a dynamic economic environment. These measures have helped firms remain competitive and continue providing value to customers.

Looking ahead, business optimism remains positive, with companies focusing on innovation, improving operational efficiency, and expanding into new domestic and international markets. Firms are confident that ongoing investments in technology, workforce development, and strategic planning will sustain growth despite external uncertainties.

Overall, India’s private sector continues to be a key driver of economic expansion, reflecting a strong foundation for long-term prosperity. With robust performance in manufacturing and services, ongoing demand, and adaptive strategies, the economy is well-positioned to navigate challenges and maintain steady growth in the coming months.

Moody’s maintained India’s long-term local and foreign-currency issuer ratings, as well as its senior unsecured rating, at Baa3, with short-term ratings also unchanged. The decision reflects the agency’s confidence that India’s large, fast-expanding economy, robust foreign reserves, and domestic funding strength will continue to serve as pillars of stability even in a volatile global environment.

The reaffirmation comes just weeks after S&P Global Ratings upgraded India to “BBB” for the first time in nearly two decades, a move welcomed by the government as recognition of its economic management and reforms. While Fitch held its rating steady, Moody’s decision to maintain a stable outlook underscores a consistent global vote of confidence in India’s growth trajectory.

Moody’s acknowledged challenges linked to India’s high debt levels but emphasized that the government’s fiscal measures to boost consumption and ease the tax burden on lower- and middle-income households have laid the foundation for stronger domestic demand. Policies such as revised income tax thresholds and reduced goods and services tax (GST) rates in September 2025 are expected to provide lasting benefits by empowering households and stimulating consumption-driven growth.

Analysts believe the move further signals that India is on a steady path toward a potential upgrade in the future, provided fiscal consolidation continues and public debt affordability improves. Moody’s said that fiscal measures to expand revenues and narrow deficits would strengthen India’s case for an even higher credit profile.

The announcement comes at a time when the global economy is facing headwinds from higher U.S. tariffs, shifting trade policies, and broader geopolitical uncertainties. India, however, continues to position itself as a reliable engine of growth, supported by a young population, a growing manufacturing base, and ongoing reforms under the government’s “Make in India” and renewable energy initiatives.

Global investors see the decision as a sign of India’s financial resilience and stability in an otherwise uncertain world. With steady growth, reliable domestic financing, and strong monetary policy management by the Reserve Bank of India, India is not only weathering global turbulence but also cementing its role as a key driver of the world economy.

Moody’s affirmation serves as an endorsement of India’s economic strength and a reminder that despite fiscal challenges, the country’s long-term fundamentals remain robust. For policymakers, the message is clear: India’s stability offers a platform for even greater global integration and investment opportunities in the years ahead.