S&P Global India Composite Purchasing Managers Index (PMI)

Markit Composite PMI is a monthly summary report concerning the changes in the working conditions of private companies in Indian manufacturing and service sectors. The indicator is based on monthly surveys of purchasing managers working in the country's private companies.

Often purchasing managers can track changes in market conditions prior to other company employees, because purchases precede company's production activities. Thus, they are among the first to see when conditions change for better or for worse. The sample for the survey is chosen so as to cover the maximum possible number of large companies across the country.

Purchasing managers complete a questionnaire, in which they assess the basic parameters of their work: input and output prices, employment, production, new orders, etc. Survey participants provide relative estimates, that is, if the data is up, or if the data is down or if the data remains the same. Individual subindices are calculated based on these answers. These subindices characterize inflation, employment and other key indicators of economic activity.

The index is seasonally adjusted. Individual weights are given to polled companies. Readings above 50 indicate that most of respondents characterize current business conditions as positive. Readings below 50 mean worsening of business conditions.

PMI is one of the most popular indexes, which is closely watched by analysts. It provides operational information covering business activity in the entire Indian private sector. It is interpreted as a leading indicator of production and inflation. PMI growth is an indication of favorable market conditions and can be seen as positive for Indian rupee quotes.