India Manufacturing Growth Strongest In Over 17 Years

(RTTNews) - India's manufacturing sector expanded at the quickest pace in seventeen-and-a-half years amid robust growth in orders and production on the back of strong demand conditions, final survey data from S&P Global showed on Monday.

The HSBC manufacturing Purchasing Managers' Index rose to 59.3 in August from 59.1 in July. A score above 50 indicates expansion, and the same was below the flash estimate of 59.8.

Production volumes grew at the sharpest pace in close to five years, linked to a better alignment of supply with demand.

New orders increased to broadly the same extent as in July, which was the fastest in 57 months, led by demand buoyancy along with fruitful advertising. The rise in new export orders was the slowest in five months, though sharp overall, as firms received fresh orders from clients in Asia, Europe, the Middle East, and the US.

"The increase of US tariffs on Indian goods to 50 percent might have contributed to the slight easing in new export orders growth, as American buyers refrain from placing orders in the midst of tariff uncertainty," Pranjul Bhandari, Chief India Economist at HSBC, said.

Indian manufacturers continued to add workforce numbers in August, but the pace of job creation eased to the weakest since November 2024. The survey showed there was an absence of pressure on supply chains and only a marginal increase in outstanding business volumes.

On the price front, input prices continued to increase, though the overall rate of inflation was moderate. On the other hand, the selling price inflation rose to a 3-month high.

Looking ahead, firms remained confident about output expectations over the next twelve months, and the overall level of positive sentiment recovered from July's three-year low.