India's private sector activity accelerated in April despite disruptions from the Middle East conflict, with HSBC's flash India Composite Purchasing Managers' Index (PMI) rising to 58.3 in April from 57.0 in March, staying well above the 50-mark that separates expansion from contraction for nearly five years, according to Reuters. The uptick was led by manufacturing, where the PMI climbed to 55.9 from 53.9, while the output index jumped to 59.1 from 55.7. Services activity also strengthened, though at a more modest pace, with the business activity index inching up to 57.9 from 57.5. As per HSBC's chief India economist Pranjul Bhandari, the survey indicated that firms are building buffer stocks to manage the uncertainties around the longevity of the supply-side shock, with manufacturing leading the upturn through faster growth in output and new orders.
The Iran war is creating global consumer goods inflation as Chinese exporters begin lifting prices on everything from swimsuits to air conditioners, according to Bloomberg reports. More than a dozen categories of consumer goods saw sharp year-on-year price increases in March, snapping a sustained decline that had helped restrain global inflation for years. Chinese exporters, who had been cutting prices for almost three years due to overcapacity and intense competition, are now passing on higher costs as the Iran war drives up oil-linked input costs. This represents a huge reversal from before the Iran war, when price growth in major economies was headed back toward target. As per Business United States, the conflict has thrown the global economy into turmoil, with oil trading above $100 a barrel and a fifth of the world's oil supplies flowing through the Strait of Hormuz that Iran is now demanding sovereignty over.
The war is creating a massive food security crisis with over 45 million people facing increasingly severe food scarcity, according to Business United States analysis. Urea and ammonia prices have surged 50% and 20% respectively since the war began in early February, with the US relying on 50% of domestic urea consumption through imports. Fertilizer costs have increased by 30%, creating unprecedented challenges for farmers during the critical spring planting season. US farmers are facing $138 per acre losses for soybeans and $230 per acre for corn, as reported by Business United States. The crisis is particularly acute in the Midwest Corn Belt states where farmers need fertilizer applications now, with a third of global urea and a quarter of ammonia production coming from the Gulf region. Diesel prices have risen 60% since the war began, creating major cost drivers across the agricultural supply chain.
Consumer goods companies in India are experiencing a sharp rise in input costs due to the ongoing war in the Middle East, as reported by The Times of India. The conflict, which began on February 28 when the US and Israel launched joint strikes on Iran, has created significant supply chain disruptions. Tehran's retaliation by choking the crucial Strait of Hormuz pipeline has strained global energy flows, with the pipeline carrying 20% of global energy supplies. This disruption has pushed up commodity prices and crude-linked products, while also increasing freight costs and making imports more expensive due to the falling rupee. As per Business United States, the Persian Gulf and Arab states provide 20% of global oil production and 20% of liquefied natural gas, making the Strait of Hormuz bottleneck critical for global energy security. India, one of the world's largest importers of liquefied petroleum gas (LPG), has faced shortages, prompting the government to prioritise household supply over industrial use — a move that could weigh on some businesses.
According to The Times of India, companies are struggling with volatile input costs that are forcing firms to track costs on a near-daily basis and review pricing frequently. Havells India CEO Anil Rai Gupta stated that the company is taking a cautious approach and reviewing the situation month by month, noting that he has not seen such price escalation in recent memory. Bajaj Consumer Care MD Naveen Pandey revealed that costs across the business have increased between 20% and 60%, with the war creating extreme volatility in prices of light liquid paraffin and packaging materials. As reported by Bloomberg, Chinese exporters are experiencing similar stress, with Pang Ling, a sales manager at a Shanghai-based medical catheter maker, stating she panicked watching plastic costs climb almost every single day. Despite external headwinds, employment rose at the fastest pace in 10 months, indicating firms remain optimistic enough to expand their workforce, according to the survey. However, overall business confidence slipped from the previous month, reflecting uncertainty over the duration of the conflict and its impact on energy supplies.
As reported by The Times of India, companies have already raised prices in several categories over the past month, including air-conditioners, refrigerators, soaps, detergents, hair oil, apparel, decorative paints and footwear. Some companies have also reduced pack sizes to deal with higher costs. Parle Products VP Mayank Shah described the pressure on input costs as very high with the uncertainty being 'killing'. According to Bloomberg, exporters are raising prices on synthetic fiber products like swimsuits and ski-suits by low-to-mid single digit percentages, while syringes were one of the hardest hit products, with prices up as much as 20% in March. AWL Agri Business ED Angshu Mallick revealed that the company has already increased edible oil prices by ₹7-10 per kg to pass on higher freight costs. As per HSBC's Pranjul Bhandari, input cost inflation, while easing from March, remained elevated and among the highest levels seen in nearly three years, with firms continuing to pass on some of these costs though output price increases lagged behind input price pressures.
The data comes as policymakers and investors assess the economic fallout of the conflict, with the International Monetary Fund pegging India's growth at 6.5% but warning that inflationary risks could weigh on the economy if energy prices remain elevated. Despite the external headwinds, business activity was supported by capacity expansion, improved demand conditions and investments in technology, according to the survey. However, rising input costs, especially from commodities or energy, remain an important factor to watch, as noted by Swastika Investmart's Santosh Meena. The rebound points to resilient domestic demand at the start of the new fiscal year, even as businesses navigate supply disruptions and higher input costs triggered by the ongoing war in the Middle East. As per HSBC's Pranjul Bhandari, the crisis could potentially form an 'autocracy bloc' of Russia, China, and Belarus with significant leverage over global food security, creating new geopolitical dynamics in agricultural trade.
