India PMI Expands Sharply with Boost from Manufacturing Sector

India's PMI showed a strong rebound in April, signaling a solid start to the new fiscal year as private sector activity picked up pace.

The rise in India's PMI was largely driven by the Manufacturing sector, which saw a sharp recovery in output and new orders. Strength in the Manufacturing sector helped push the HSBC Flash India PMI Composite Output Index up to 58.3 from 57.0 in March, staying well above its long-term average and pointing to robust expansion.

Manufacturing led the gains, with both output and new orders rising by more than three points. The HSBC Flash India Manufacturing PMI climbed to 55.9 from 53.9, reflecting stronger demand and improved business conditions. Services activity also expanded, but at a slower pace, showing a clear shift in growth momentum toward manufacturing.

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New business grew at a historically strong rate, supported by better demand, capacity expansion, and increased investment in technology. Export trends were uneven. Manufacturing exports recorded their fastest growth in nine months, while services exports slowed to their weakest pace in over a year, partly impacted by disruptions linked to the Middle East conflict.

Cost pressures remained elevated as prices for fuel, gas, oil, and raw materials such as chemicals, metals, and food continued to rise. Although input cost inflation eased slightly from March, it was still the second-highest level in nearly three years. Companies raised selling prices, but not as quickly as input costs increased. Inflation pressures were more intense in manufacturing, while easing somewhat in services.

Employment growth strengthened to a ten-month high, supported by expanding business activity and positive demand expectations. Business confidence softened slightly from March but remained among the strongest levels seen in the past 18 months. Meanwhile, manufacturers increased inventories, with finished goods rising at the fastest pace since May 2015, signaling confidence in sustained demand.