India Manufacturing Growth Hits 4½-Year Low

The HSBC India Manufacturing PMI fell to 53.8 in March 2026 from 56.9 in February, exceeding expectations for a slight easing to 56.8, preliminary estimates showed. This marks the weakest expansion in factory activity since September 2021, as output growth slowed amid softer domestic demand and uncertainty from the Middle East conflict. New orders rose only modestly, while international sales surged at a record pace. Employment increased moderately, supporting ongoing capacity expansion. Input purchases and inventories also rose, though at a slower pace than February, with delivery times improving. Input costs jumped at the fastest rate in 45 months, while output prices rose at the strongest pace in seven months, reflecting elevated inflationary pressures. Manufacturers remained cautiously optimistic about growth over the coming year, citing efficiency improvements, marketing efforts, and new client enquiries.

The HSBC India Manufacturing PMI rose to 56.9 in February 2026 from 55.4 in January, revising lower from initial estimates of 57.5. Still, this marked a four-month high and signals a notable improvement in operating conditions. Factory output expanded at the fastest pace in four months, supported by strong domestic demand and rising new orders, although growth in new export orders slowed to the weakest in 17 months. Employment rose slightly, recording the fastest pace in four months, as firms hired to cope with higher workloads. Input purchases and inventories expanded at the quickest pace in three months, reflecting increased production needs and precautionary stock building. Input cost inflation remained moderate and unchanged from January, while output prices rose at a faster rate, outpacing the long-run trend. Backlogs of work rose marginally to a seven-month high, and firms remained optimistic about output over the year, with 16% anticipating growth.

The HSBC India Manufacturing PMI rose to 57.5 in February 2026 from 55.4 in January, preliminary estimates showed. This signals robust expansion in factory activity and marks a four-month high, as output growth accelerated, supported by stronger domestic demand, while new orders increased at the fastest pace since last November. However, export sales expanded only modestly, registering the slowest rise in 16 months. Employment also rose modestly, reflecting firms hiring to manage higher workloads, while input purchases and inventories increased to meet production needs and precautionary buying. In terms of prices, input costs continued to climb at a sustained pace, matched by rising output prices, reflecting ongoing inflationary pressures. Business sentiment remained positive, with manufacturers optimistic about growth over the year despite cost pressures.