India’s manufacturing sector in February recorded 56.3, a decline from 57.7 in January. While manufacturing growth was above its long-run average, the rate of growth receded to its lowest since December 2023, according to an S&P Global report.
India’s Manufacturing PMI in January accelerated to 57.7 from 56.4 in the previous month, revealed data from S&P Global. Indian goods producers kicked off the year to a robust start, with new orders rising at the quickest pace since July 2024.
New export orders rose strongly in February, as manufacturers continued to capitalise on robust global demand for their goods. Although softer than January’s near 14-year high, the pace of expansion was sharp. Despite lower numbers, the seasonally adjusted PMI report indicated a robust improvement in the health of the Indian manufacturing sector.The report registered an improvement for businesses across all three monitored sub-sectors: consumer, intermediate and investment goods.
Output rose halfway through the final fiscal quarter, extending the current growth streak to 44 months. Where an increase was noted, manufacturers remarked on sustained improvements in demand, tech investment and the commissioning of new projects.
There was a perpetual rise in new business intakes, a result of strong client demand adding the need to price better amongst competitors.
Expressing his views on the PMI activity, Pranjul Bhandari, Chief India Economist at HSBC, said: “India recorded a 56.3 manufacturing PMI in February, down slightly from 57.7 during the prior month, but still firmly within expansionary territory. Robust global demand continued to boost growth in the Indian manufacturing sector, which increased its purchasing activity and employment. Business expectations also remained very strong, with nearly one-third of survey participants foreseeing greater output volumes in the year ahead. Although output growth slowed to the weakest level since December 2023, overall momentum in India’s manufacturing sector remained broadly positive in February.”
The pace of job creation was the second-highest recorded in PMI history, following January 2025. Around 10% of firms reported an increase in hiring activity, while only 1% reduced their workforce.
Companies that experienced growth attributed it to strong client demand, prompting them to replenish inventories and mitigate the risk of input shortages. Consequently, pre-production stock levels saw another sharp rise in February.
Meanwhile, Indian manufacturers encountered further increases in input costs, with frequent mentions of higher prices for bamboo, leather, marketing, rubber, and telecom services. On a positive note, overall inflation continued to ease for the third consecutive month, reaching its lowest level in a year.
Movement of Manufacturing PMI in FY25
