India's Manufacturing Growth Slumps to Nine-Month Low Amid US Tariff Impact
There was a mild loss of overall growth momentum
New Delhi: With softer growth in sales and low production amidst difficult market conditions, India’s manufacturing sector slowed to a nine-month low in November. It is, however, learnt that US President Donald Trump’s 50 per cent tariffs on India could be a possible reason that hit the manufacturing sector, but the impact has been somewhat cushioned by diversification to other countries, a private survey said on Monday.
As per the seasonally adjusted HSBC India manufacturing purchasing managers' index or PMI, it fell to 56.6 in November from 59.2 in October, highlighting the slowest improvement in operating conditions since February. In the PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.
Commenting on the survey, Pranjul Bhandari, chief India economist at HSBC said that India’s final November PMI confirmed that US tariffs caused the manufacturing expansion to slow. “The new export orders PMI fell to a 13-month low. Business confidence, as indicated by expectations for future output, showed a big fall in November, potentially reflecting increasing concerns about the impact of tariffs,” Bhandari said, adding that the boost from the cuts in goods and services tax (GST) may be fading, and it might be insufficient to offset the tariff headwind to demand," Bhandari noted.
As per the survey, although companies suggested that the trend for international sales remained favourable – reflecting greater sales to clients in Africa, Asia, Europe and the Middle East – there was a mild loss of overall growth momentum. “On an average, new export orders rose at the weakest pace in over a year,” the survey noted.
Though India is hopeful that the first tranche of a bilateral trade deal between India and US is expected by the fall of 2025, the Trump administration’s imposition of tariffs on Indian exports has created hurdles. The Trump tariff on Indian exports has impacted India's manufacturing industry in some way or the other.
“India is hopeful of reaching a framework trade deal with the US this year itself that should address the tariff issue to the benefit of Indian exporters. India is engaged in protracted negotiations with the US on a framework trade deal that will address the reciprocal tariff challenge faced by Indian exporters,” commerce secretary Rajesh Agrawal had said last week.
On the price front, the survey showed that inflation rates receded in November, with input costs and selling charges rising at the slowest rates in nine and eight months respectively. “On the employment front, manufacturers in India adjusted their hiring efforts and purchasing activity in line with a slowdown in new order growth,” it noted.
Meanwhile, India's industrial production growth slowed to a 13-month low of 0.4 per cent in October this year due to the poor showing by power, mining and manufacturing sectors. The factory output, measured in terms of the index of industrial production (IIP), had expanded by 3.7 per cent in October 2024, the government data released by National Statistics Office (NSO) said on Monday.
The previous low was recorded as flat growth in September 2024. The NSO revised the industrial production growth to 4.6 per cent for September 2025 from the provisional estimate of 4 per cent released last month. “The manufacturing sector's output growth decelerated to 1.8 per cent in October 2025 from 4.4 per cent in the year-ago month,” the NSO data showed.
“Similarly, mining production contracted by 1.8 per cent against a growth of 0.9 per cent recorded a year ago, while power production contracted by 6.9 per cent in October 2025, compared to a 2 per cent expansion in the year-ago period,” the data showed.