India's manufacturing Purchasing Managers’ Index (PMI) hits 16-month high at 59.1 in July on high demand

In July 2025, India's manufacturing sector experienced robust growth, as the HSBC India Manufacturing Purchasing Managers’ Index (PMI) climbed to a 16-month peak of 59.1, an increase from 58.4 in June, based on data from S&P Global. The increase was mainly fueled by a significant rise in factory orders, the quickest in almost five years, coupled with strong output growth, especially in intermediate goods. Nonetheless, the optimism was moderated by business sentiment, which fell to a three-year low due to increasing competition and inflation worries. Although hiring was muted, the outlook for manufacturing stayed optimistic, buoyed by mild input cost inflation and enhanced pricing power. Though input costs saw a modest increase from rising aluminium, rubber, and steel prices, businesses lifted selling prices more rapidly, bolstered by robust demand. Inventory trends also revealed a replenishment of inputs and a reduction in finished goods, signifying robust sales. In summary, as India's manufacturing industry approaches the latter part of 2025 with solid momentum, inflationary and competitive challenges could hinder ongoing growth