Slowdown in Indian industry: May PMI reveals a slowdown affecting Spanish exports

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Asian Market

India's private sector growth slowed in May 2026, weighed down by a significant weakening in the manufacturing sector, according to preliminary PMI data. While this slowdown keeps activity in expansionary territory, it presents a new risk scenario for Spanish companies with commercial and investment interests in the Asian giant.

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The private sector of India It has registered a slowdown in its pace of expansion in May 2026, dragged down by a notable weakening in the manufacturing sector, according to the leading index. HSBC Flash India Composite PMIThis cooling, although keeping the indicator in a solid growth zone, raises alarms for Spanish companies operating in the Asian giant, especially those linked to the industrial supply chain.

Business activity in the IndiaThe sector, which had been showing exceptional dynamism in recent months, has lost momentum. The main reason for this slowdown is the Manufacturing sectorwhich has experienced the most pronounced slowdown, while the services sector, although also moderating its progress, demonstrates greater resilience.

Analysis of May PMI Data

The preliminary, or "flash," data from Purchasing Managers Index (PMI) compound for the India They stood at 58.5 points in May, down from 61.0 in April. Despite the drop, any reading above 50 indicates expansion in activity. However, the composition of the data reveals the divergence between sectors.

El PMI manufacturer It plummeted to 56.2 points, its lowest level in several months, compared to 59.1 the previous month. In contrast, the PMI of services It remained robust at 59.5, although still below April's 60.8. This gap underscores how weak demand for industrial goods is impacting the overall economy.

PMI Indicator India	May 2026 (Flash)	April 2026
HSBC Flash India Composite PMI	58.5	61.0
HSBC Flash India Manufacturing PMI	56.2	59.1
HSBC Flash India Services PMI	59.5	60.8

According to declarations of Pranoy SharmaSenior Economist at HSBC India, who are "The slowdown in the manufacturing sector appears to be due to a combination of factors, including weakening international demand and rising input costs that are putting pressure on company margins.Sharma adds that "despite this setback, the fundamentals of the Indian economy remain solid, especially in the services sector, driven by strong domestic demand."

Implications for the Spanish business sector

This slowdown in the industrial engine of the India This has direct consequences for Spanish companies with operations in the country. The analysis carried out by this publication identifies several critical points to monitor:

• Exporters of capital goods: The lowest industrial production in the India This could reduce the demand for machinery, components, and industrial technology from España.
• Automotive sector: The subsidiaries of Spanish manufacturers and component suppliers in the India They could face a contraction in orders and a more competitive market environment.
• Productive investments: Spanish companies with plans to establish or expand production plants in the country should recalibrate their short and medium-term demand projections.
• Opportunities in Services: The resilience of the Indian services sector presents an opportunity. Spanish companies in consulting, engineering, technology, and tourism may find a more favorable environment than the industrial sector.

For Spanish executives, the key lies in closely monitoring the evolution of domestic demand in the India and diversify the business approach, paying greater attention to the opportunities that its robust service sector continues to offer.

Key points and frequently asked questions about the Indian economy

How does this slowdown affect Spanish exports to India?

Directly. Lower manufacturing activity in the India This implies a reduction in the purchase of capital goods and intermediate products, categories in which Spanish companies have a significant presence. A notable impact is expected in sectors such as machine tools, automotive components, and industrial chemicals.

Is India still an attractive market for Spanish investment?

Yes, but with nuances. Despite this temporary moderation, the long-term growth prospects of the India They remain among the highest in the world. Spanish investors must adopt a strategic approach, understanding that the market may experience cyclical volatility. The key is to analyze subsectors; the services sector and sustainable infrastructure continue to offer enormous potential.

What should logistics managers know about this change?

Logistics operators and supply chain managers should prepare for a possible fluctuation in cargo volumes between España and IndiaLower industrial demand could reduce import freight costs for raw materials. India and the export of manufactured goods from the country, affecting maritime and air routes. It is a time to renegotiate contracts and optimize inventories.