The manufacturing PMI in India surged to 56.9 in February, up from 55.4 in January, reaching a four-month peak. This increase was driven by a significant rise in domestic demand for Indian goods, leading to higher new order intakes and the most substantial upturn in production volumes in four months, according to S&P Global data.
The latest seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) indicates a notable enhancement in the sector’s health. Pranjul Bhandari, Chief India Economist at HSBC, noted that the final manufacturing PMI for India showed accelerated manufacturing activity in February, with output expanding at a faster pace for the second consecutive month, supported by robust domestic orders.
Despite this positive trend, growth in new export orders continued to slow down, starting from mid-2025, which somewhat constrained employment growth in the manufacturing industry, as mentioned by Bhandari.
Goods producers in India reported buoyant demand, effective marketing strategies, and increasing client needs as factors driving the expansion in new business intakes. The growth rate was historically high, marking the strongest performance since last October.
Additionally, output increased at the quickest rate in four months, surpassing its long-run average. Panel members attributed this growth to efficiency enhancements, strong underlying demand, increased new work intakes, and technological investments, as per the report.
Cost pressures remained moderate, rising at a similar pace to January. However, output charge inflation slightly increased, outpacing its long-run average, as highlighted in the report.
The PMI serves as an overall indicator derived from metrics like new orders, output, employment, supplier delivery times, and purchase stocks. Companies that experienced growth in external sales attributed it to gains from Asia, Europe, the Middle East, and the US.
While various regions contributed to growth, there was a slowdown in new export orders, with February marking the slowest increase in 17 months, aligning more closely with its long-run average growth rate, according to the report.
