NEW DELHI: India’s manufacturing sector has been expanding at its fastest pace in six months, fueled by a surge in new orders and record-breaking export growth, according to the
HSBC India Manufacturing PMI
for January, published on Monday.
The purchasing managers’ index (PMI) climbed to 57.7 in January, up from 56.4, which marked one year low last December, signalling a sharp improvement in the sector’s health.
The pace of expansion was the quickest since July 2024 and comfortably exceeded the long-term average. A reading above 50 indicates growth, while anything below suggests contraction.
New orders rose at the fastest rate since July, supported by strong domestic demand and an upward momentum in international sales. Export orders, in particular, saw their steepest increase in nearly 14 years, with manufacturers reporting gains from multiple global markets.
“India’s final manufacturing PMI marked a six-month high in January. Domestic and export demand were both strong, supporting new orders growth. The employment PMI suggested robust job creation in the manufacturing industry, as the index increased to its highest level since the series was created. Input cost inflation eased for a second month, relieving pressure on manufacturers to raise final output prices,” said Pranjul Bhandari, chief India economist at HSBC.
Despite easing input cost pressures, the weakest in 11 months, firms continued to raise selling prices amid large demand and improved business confidence. The survey also noted growing optimism among manufacturers, with nearly 32 per cent of firms expecting higher output in the coming months, while only 1 per cent anticipated a decline.
Encouraged by strong sales and a positive outlook, companies ramped up hiring at the start of the fourth fiscal quarter (January–March). The employment index hit its highest level since its inception, reflecting robust job creation in the sector.
With manufacturing activity gaining momentum and global demand picking up, India’s industrial sector looks set for a solid start to 2025.
