Manufacturing growth hits 6-month high in Jan

Fuelled by the steepest upturn in exports in nearly 14 years, India’s manufacturing sector growth has started 2025 on a strong footing and touched a six-month high in January, a monthly survey said on Monday.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose from December’s one-year low of 56.4 to 57.7 in January, supported by the fastest upturn in new export orders since February 2011. In PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

“India’s final manufacturing PMI marked a six-month high in January. Domestic and export demand were both strong, supporting new orders growth,” said Pranjul Bhandari, Chief India Economist at HSBC.

Goods producers attributed the substantial increase in new orders to better domestic demand and a pick-up in international sales. Subsequently, manufacturers in India continued to scale up production volumes. The latest increase was substantial and the fastest since October 2024.

Going forward, companies turned more optimistic about output prospects, with nearly 32 per cent of firms forecasting growth and just 1 per cent expecting a reduction.

According to panel members, buoyant underlying demand, better customer relations, favourable economic conditions and marketing efforts all bode well for growth prospects. Robust sales gains and upbeat forecasts prompted companies to recruit additional workers at the start of Q4 of this fiscal.

On the price front, cost pressures retreated to their weakest in 11 months, but selling prices rose solidly amid buoyant demand.