India’s manufacturing activity climbed to 57.7 in January, rising from a one-year low of 56.4 recorded in December 2024. The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) displayed a robust improvement in the health of the sector in January.
The rate of expansion seen in the month under review was the quickest since last July and even outpaces the long-run average. The PMI, compiled by S&P Global, showed that Indian manufacturers began the year on a strong note after seeing moderation in growth in the previous month.
Input Costs And Inflation
New orders climbed at the quickest pace since last July, backed by the sharpest upturn seen in exports in almost 14 years. Cost pressures also eased to their weakest seen in 11 months, while job creation expanded at the greatest level seen in almost two decades of data collection.
Input costs rose in the month, while inflation rate remained modest and the weakest since February 2024. The prices charged for Indian goods increased at the slowest pace in four months during January. However, selling prices also climbed strongly amid buoyant demand, the survey revealed.
“Hikes to selling prices were supported by positive client appetite. Finally, capacity pressures among manufacturers in India remained mild, as indicated by only a fractional increase in outstanding business volumes. Underlying data showed that strong job creation in recent months enabled companies to stay on top of their workloads,” the survey stated.
Pranjul Bhandari, Chief India Economist, HSBC, commented, “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.”
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