India’s private sector in December 2025 is projected to end with stalled job creation, according to PMI data released by S&P Global on Tuesday, as slower business activity across manufacturing and services reduced the need for additional hiring, raising concerns for employment momentum at year-end.
What changed in India’s private sector hiring
India’s private sector recorded its weakest employment growth since early 2024 in December. Companies reported that existing workforce levels were adequate to manage current workloads. As a result, overall staffing numbers remained largely unchanged during the month.
HSBC’s flash India Composite Purchasing Managers’ Index fell to 58.9 from 59.7 in November. While the index stayed above the expansion threshold, the slower pace of activity reduced hiring needs across sectors.
Manufacturing and services cut back on recruitment
Hiring slowed across both manufacturing and services. The manufacturing PMI dropped to 55.7 from 56.6, marking softer operating conditions for goods producers. Firms in the sector cited slower new orders as a reason for holding back on recruitment.
The services activity index declined to 59.1 from 59.8. Service providers reported muted demand toward the end of the year, which limited workforce expansion in India’s largest employment-generating sector.
Business confidence weighs on employment
Business sentiment weakened for a third straight month in December. Overall optimism fell to its lowest level since July 2022, according to the survey. The decline was most visible in services, where firms expressed caution about future demand.
This drop in confidence contributed directly to slower hiring. Companies chose to delay recruitment plans and rely on current staff instead of expanding payrolls.
Costs, prices, and labour outlook
Input cost pressures remained muted in December, helping firms manage expenses without cutting jobs. Selling price increases stayed modest, while factory output charges eased to their weakest rise since March.
Andrew Harker, economics director at S&P Global Market Intelligence, said firms benefited from subdued inflation pressures as the year closed. However, the December PMI data shows that employment growth in India’s private sector slowed alongside softer activity, according to figures cited by Reuters.
