Key Takeaways
- Russian President Vladimir Putin expressed appreciation for China's and India's efforts to resolve the Ukraine crisis at the Shanghai Cooperation Organisation (SCO) Summit in Tianjin, China, highlighting a growing role for Asian powers in global conflict resolution.
- India's manufacturing sector demonstrated robust health in August, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) registering 59.3. While slightly lower than the preliminary estimate of 59.8, this marks the fastest improvement in operating conditions in over 17 years.
- The strong manufacturing performance, coupled with a record surge in the services sector, propelled India's overall private sector activity to its highest level since the survey began in December 2005, with the Composite PMI soaring to 65.2 in August.
- Rising input costs and strong demand led to output charges being raised at the sharpest pace in 12-and-a-half years, suggesting persistent inflationary pressures that could influence the Reserve Bank of India's (RBI) monetary policy.
Leaders from across Eurasia convened in Tianjin, China, for the Shanghai Cooperation Organisation (SCO) Summit from August 31 to September 1, 2025, addressing critical geopolitical and economic issues. A significant development emerged as Russian President Vladimir Putin publicly lauded the diplomatic initiatives of China and India aimed at de-escalating the ongoing Ukraine crisis.
During his address, President Putin linked the origins of the Ukraine conflict to Western policies and attempts to draw Ukraine into NATO. He also revealed that "understandings" reached at his recent Alaska summit with U.S. President Donald Trump could "open a way to peace in Ukraine," a development he had already discussed with Chinese President Xi Jinping. The SCO, often viewed as a counterweight to Western influence, served as a platform for these discussions amidst evolving global power dynamics.
Meanwhile, India's economic engine continued to fire on all cylinders, with its manufacturing sector demonstrating remarkable resilience and growth in August. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, registered 59.3 for August, a slight downward revision from the flash estimate of 59.8 but still an increase from July's 59.1. This robust reading signifies the fastest improvement in factory operating conditions in over 17 years, driven by a rapid expansion in production and surging domestic demand.
The manufacturing sector's strength contributed to an overall booming private sector. The HSBC Flash India Composite Output Index soared to an unprecedented 65.2 in August, up from 61.1 in July, marking the quickest expansion since the survey's inception in December 2005. This historic growth was spearheaded by the services sector, which hit an all-time high of 65.6, alongside the strong manufacturing performance.
However, this rapid economic expansion has not been without inflationary consequences. Firms reported significant pricing power, raising output charges at the sharpest rate in 12-and-a-half years due to higher wage bills and raw material costs. This surge in prices is likely to keep inflation elevated, potentially compelling the Reserve Bank of India (RBI) to maintain a restrictive monetary policy stance for an extended period. Despite a marginal slowdown in manufacturing hiring, overall job creation accelerated in August, reflecting broad-based optimism among businesses. India's economy grew at a robust 7.8% in Q1 FY26, solidifying its position as the world's fastest-growing major economy.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.