India's Manufacturing Grows as Export Demand Hits New Highs

India's manufacturing industry recorded good growth in June as the HSBC India Manufacturing Purchasing Managers' Index (PMI) rose to 58.4, a 14-month high from 57.6 during May. This healthier condition of the industry is well above its long-term average level of 54.1 and symbolizes firm momentum at the beginning of the new fiscal quarter.

Propelling the boom was a steep rise in new domestic and overseas orders, which sparked record job creation and output increase. Expansion in production picked up pace at the quickest rate since April 2024, supported by increasing sales, enhanced operation efficiency, and solid market demand.

• India’s PMI hit a 14-month high of 58.4 in June.
• A surge in new domestic and export orders drove growth.
• Finished goods inventory fell as demand outpaced supply.

Export orders, in particular, experienced one of the fastest rises in over two decades as all consumer, intermediate, and investment goods categories posted large gains. To meet this heightened demand, companies stepped up input purchases, which led to a sharp rise in inventories.

Since input prices were held in line, reaching a low since February, producers raised selling prices to protect against freight, labor, and metal cost pressures, riding along with friendly demand.

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Even with greater sales, inventories of finished goods dipped as companies tapped existing inventories to meet orders. Outstanding business volumes, which were unchanged in May, picked up the pace of growth in June.

With the help of strong domestic demand, rising foreign orders, and managed inflationary pressure, the prospects for Indian manufacturing sector are bright. Industry experts project that the sector will see steady growth in the coming times.