India's private sector output eased in September, with the HSBC Flash India Composite Output Index slipping to 61.9, against the final level of 63.2 in August, according to data released on Tuesday.

The index, which measures combined activity in manufacturing and services, was weighed down by the softer expansion in new business intakes along with slower increases in private sector output and employment. International sales during the month also rose at a slower pace to its joint-weakest since March 2025.

HSBC Flash India Services PMI Business Activity Index declined to 61.6 in September from a level of 62.9 in August, while the manufacturing PMI eased to 58.5 from 59.3 a month ago.

"The imposition of the 50% tariff rate by the US on India likely resulted in a slower rise in new export orders over August-September. This comes on the back of strong frontloading of exports to the US since early-2025," Chief India Economist at HSBC, Pranjul Bhandari, said.

However, new domestic orders have grown over the last two months, propelled by the announcements of lower goods and services tax (GST) rates.

"All said, the impact of higher tariffs has been somewhat offset by lower tax rates in the data so far," Bhandari said.