India Manufacturing Growth Hits 4½-Year Low

India's HSBC Manufacturing PMI eased to 53.5 in July 2026 from 54.2 in June, revised down from the preliminary estimate of 53.9, and marking the weakest growth since August 2021. Output and new orders continued to expand, although total sales grew at one of the slowest rates in over four years amid challenging market conditions and softer client demand. Export orders, however, accelerated, supported by stronger demand from Canada, Egypt, Indonesia, Kenya, Nepal, South Africa, Thailand and the UAE. Softer domestic demand also slowed growth in purchasing activity and employment, while input buying rose at the weakest pace in 31 months. Supply-chain conditions improved markedly, with delivery times shortening at a near-record pace. On prices, input cost inflation eased to a five-month low, while output price inflation remained moderate. Business confidence recovered on expectations of stronger demand and infrastructure spending.

India's HSBC Flash Manufacturing PMI fell to 53.9 in July 2026 from 54.2 in June, signaling a slower, below-trend improvement in factory conditions, preliminary estimates showed. This also marked the softest expansion since March 2025. Still, growth in output and new orders recovered some of the momentum lost in previous months. Export growth also picked up, with the seasonally adjusted index rising by nearly four points. Manufacturers stepped up purchasing activity, while a further improvement in supplier performance supported a faster increase in input inventories. Stocks of finished goods also returned to growth after declining in June. Employment continued to rise, and unfinished work increased further during the month. On the price front, both input cost inflation and output price inflation accelerated. Meanwhile, manufacturers grew more optimistic about the year ahead, with business confidence strengthening from June.

India's HSBC Manufacturing PMI eased to 54.2 in June 2026 from 55.0 in May, revised lower from the preliminary reading of 54.5, signaling the second-weakest improvement in factory activity since mid-2022. Growth in output and new orders slowed to among the weakest rates in four years, while export orders rose at the softest pace since March 2023 amid subdued demand from some European markets. Softer demand also led to slower increases in purchasing activity, employment, and input inventories, while finished goods stocks fell at the fastest pace in six months as firms aligned production with current demand. Cost pressures eased, with input price inflation slowing to a four-month low and output charge inflation easing to a three-month low, reducing the need for aggressive price increases. Meanwhile, supplier delivery times improved only marginally, and business confidence slipped to a five-month low as concerns over demand and market conditions weighed on the outlook.