Page 30 - Policy Economic Report - September 2026

POLICY AND ECONOMIC
OIL & GAS MARKET

The services sector also maintained a solid pace of expansion. The Services PMI Business Activity Index
rose to 55.8 in September from 54.1 in August, indicating a further strengthening of business activity.
Service providers benefited from stronger order intake and increased marketing activity, while
employment continued to expand across both services and manufacturing. Aggregate private-sector
employment recorded a solid increase during the month, with job creation occurring at broadly similar
rates in the two sectors.

External demand remained positive but showed some moderation. New export orders continued to
increase across the private sector, although the pace of expansion was the weakest in almost three years.
The slowdown was concentrated in services, while manufacturers recorded a marginally stronger increase
in overseas orders. Firms reported export gains from markets including Brazil, Europe, the UAE and the
United States.

Figure 14: HSBC India Manufacturing PMI

Source: HSBC, S&P Global PMI

India’s external position

Foreign Exchange Reserves

India’s external position remained resilient in 2026, supported by a strong reserve position, robust
services exports and a relatively stable external financing position. While higher global energy prices and
geopolitical uncertainties have increased risks to the external sector, India’s sizeable foreign exchange
reserves continue to provide an important buffer against external shocks and volatility in global financial
markets.

India’s foreign exchange reserves strengthened significantly during the period under review. According to
the Reserve Bank of India (RBI), India’s foreign exchange reserves reached a record high of US$785.71
billion as of the week ended 4 September 2026, registering a substantial weekly increase of US$44.90

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