India Manufacturing Growth Picks Up in January

The HSBC India Manufacturing PMI rose to 55.4 in January 2026 from 55.0 in December, but was revised lower from the initial estimate of 56.8. The reading still indicates a solid improvement in operating conditions at the start of the year. Factory output expanded at a faster pace, supported by robust domestic demand, while new orders also increased, driven mainly by the domestic market, with a modest rise in exports. Employment rose slightly, the fastest pace in three months, as firms hired to meet higher workloads. Input purchases and inventories expanded, reflecting greater production needs and precautionary buying, while input costs rose at the fastest pace in four months, albeit modestly by historical standards. Output prices increased moderately, constrained by competitive pressures and efficiency gains. Lastly, business confidence fell to a three-and-a-half-year low, with only 15% of firms expecting output growth over the year.

The HSBC India Manufacturing PMI rose to 56.8 in January 2026 from 55.0 in December, marking the strongest improvement in operating conditions in three months, according to preliminary estimates. Factory output expanded at a faster pace, supported by stronger domestic and international demand, with new orders rising at the quickest rate in four months. Employment also increased modestly, reflecting renewed hiring to align resources with higher workloads, particularly at junior- and mid-level positions. Input purchases rose sharply, with firms spending more on materials including food, fuel, and steel, while suppliers’ delivery times improved. Input cost inflation accelerated but remained moderate by historical standards, and output price growth kept pace with rising input costs. Overall business confidence rose to a three-month high, supported by efficiency gains, robust demand, marketing initiatives, and favorable exchange rates.

The HSBC India Manufacturing PMI fell to 55.0 in December 2025, revised lower from initial estimates of 55.7, down from 56.6 in November. This marks the weakest improvement in two years, as factory output expanded at the slowest pace since October 2022, alongside softer growth in new orders. Export demand also increased at the weakest rate in 14 months, with new orders mainly coming from Asia, Europe, and the Middle East. Employment rose only marginally, reflecting sufficient staffing amid easing workloads. Input cost inflation remained subdued, rising modestly, while output price inflation eased to a nine-month low. Stocks of purchases increased at the slowest pace in two years, while finished goods inventories fell sharply as firms used existing stock to meet current demand. Business confidence softened to its lowest in nearly three-and-a-half years, as firms cited competitive pressures and market uncertainty despite tailwinds from new products and advertising.