India's Manufacturing Growth Hits 8 Month High In April

As per the HSBC Flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, the index rose to 60.0 in April from 59.5 in March, marking the strongest growth in combined manufacturing and services activity since August. The survey, however, highlighted that the combined output in manufacturing and service witnessed quicker increases across the sectors, the fastest rate of expansion since August 2024.

“The manufacturing sector showed particularly strong momentum, with its PMI climbing to 58.4, up from 58.1, reaching a one-year high. The services sector also maintained solid growth, with its PMI increasing to 59.1 from 58.5, the highest level in four months. However, the private sector firms noted a record increase in new export orders during April amid healthy demand from Africa, Asia, Europe, the Middle East and the Americas," the survey showed.

Commenting on the survey, Pranjul Bhandari, chief India economist at HSBC, said that new export orders accelerated sharply, likely buoyed by the 90-day pause in the implementation of tariffs. “As a result, output and employment grew, for both, manufacturers and service providers. Cost inflation was in line with March levels, but prices charged rose a tad faster, leading to improved margins,” Bhandari said.

The survey also noted that companies operating in India’s private sector suggested that output levels had been raised in response to efficiency gains, positive demand trends and successful advertising. “Some panellists also reported an improvement in international competitiveness as a result of the rupee’s depreciation against the US dollar,” it said.

On the inflation front the survey also said although input prices continued to increase across the Indian private sector, the rate of inflation matched that seen in March and remained below its long-run average. “Panellists that indicated greater expenses remarked on higher chemical, freight, labour, leather, rubber and steel costs. Services companies noted a quicker increase in expenses than manufacturers,” it added.