New Delhi: India’s manufacturing sector expanded at its fastest pace in four months in February, supported by strong domestic demand even as export growth softened, according to the latest survey data.
The HSBC India Manufacturing Purchasing Managers’ Index, compiled by S and P Global, rose to 56.9 in February from 55.4 in January. Although the reading was slightly below the preliminary estimate of 57.5, it remained well above the 50 mark that separates expansion from contraction, signalling sustained growth in factory activity.
The improvement was largely driven by robust domestic orders, which increased at their strongest rate since October. Production volumes also rose at the quickest pace in four months, with manufacturers citing efficiency gains, steady demand and investments in technology as key contributors.
India’s broader economic outlook remains resilient. The economy recorded growth of 7.8 per cent in the October to December quarter, supported by a 13.3 per cent expansion in manufacturing output. For the full fiscal year ending in March, growth is projected at 7.6 per cent.
While domestic indicators were upbeat, export performance showed signs of moderation. New export orders expanded at their slowest pace in 17 months, reflecting ongoing uncertainty in global trade conditions. The survey period followed a reduction in United States tariffs on Indian goods to 18 per cent from 50 per cent, although fresh global tariff measures announced by President Donald Trump have added to external headwinds.
Input cost inflation remained stable compared to January. However, manufacturers increased selling prices at the fastest rate in four months, taking advantage of firm domestic demand to pass on higher costs.
Employment in the sector rose to a four month high, though the pace of hiring was modest. Only a small proportion of firms reported adding staff, while most maintained existing workforce levels.
Business confidence about the year ahead strengthened to its highest level in four months, underscoring expectations of continued economic momentum despite softer external demand.
