India Manufacturing Growth Hits 4½-Year Low

India’s HSBC Manufacturing PMI came in at 54.7 in April 2026, revised down from the preliminary estimate of 55.9 but still up from 53.9 in the previous month. While both output and new orders continued to expand, the pace of growth remained subdued compared to levels seen over the past three-and-a-half years. On the employment front, hiring gathered momentum, with job creation rising at the fastest rate in ten months as firms expanded capacity in line with growth expectations. Inflationary pressures intensified, with input costs rising at the fastest rate since August 2022, driven by higher prices for key materials amid the ongoing war in the Middle East. In response, manufacturers passed on these costs, raising output prices at the sharpest rate in six months. Finally, sentiment remained broadly positive, as manufacturers expressed confidence that continued marketing initiatives and the anticipated clearance of pending projects would support production growth in the months ahead.

The HSBC India Manufacturing PMI rose to 55.9 in April 2026 from 53.9 in March, signalling a stronger improvement in factory conditions, flash data showed. Output and new orders expanded at faster rates, supported by improved demand, capacity expansion, and technology investment. New export orders grew at their fastest pace in nine months, though external demand rose more moderately overall. Employment also increased at a 10-month high as firms expanded staffing in response to stronger order inflows. Input purchasing accelerated, while firms continued to build inventories, with finished goods stocks rising for the first time in six months at the fastest pace since 2015. Cost pressures remained elevated, driven by higher fuel, gas, oil, and raw material prices, although input cost inflation eased from March’s peak. Firms continued to raise output prices at a more measured pace, reflecting partial pass-through of higher costs amid competitive pressures.

The HSBC India Manufacturing PMI fell to 53.9 in March 2026 from 56.9 in February, slightly higher than preliminary estimates of 53.8. This marked the weakest improvement in business conditions in nearly four years, as factory output and new orders rose at the slowest pace since mid-2022, weighed down by cost pressures, intense competition, and heightened market uncertainty amid the Middle East conflict. Meanwhile, employment increased at the fastest rate in seven months as firms added staff, while input buying and inventories continued to expand, albeit at a slower pace. External sales also saw their strongest expansion since September 2025, supported by gains across multiple regions. On prices, input costs rose sharply to a 43-month high, but output price inflation remained modest, reflecting firms’ efforts to absorb higher expenses. Firms became more optimistic about production over the year, even as backlogs of work declined for the first time in nearly 18 months.