Indian Manufacturers Bounce Back Strong in 2025 After December Slowdown

After a slowdown in growth in December, Indian manufacturers began 2025 on a strong footing. The HSBC India Manufacturing PMI for January revealed that new orders increased at the fastest rate since last July, driven by the highest rise in exports in almost 14 years, resulting in greater output growth.

India's concluding manufacturing PMI reached a six-month peak in January. Both domestic and export demand remained robust, bolstering the increase in new orders. The employment PMI indicated strong job growth in the manufacturing sector, as the index rose to its peak level since the series began. Input cost inflation reduced for a second month, alleviating pressure on manufacturers to increase final output prices," stated Pranjul Bhandari, Chief India Economist at HSBC.

Cost pressures have eased to their lowest level in 11 months, while selling prices surged robustly due to strong demand and increased business confidence, according to the monthly PMI report. Increasing from December's one-year low of 56.4 to 57.7 in January, the Purchasing Managers Index indicated a strong enhancement in the sector's health. The pace of growth was the fastest since last July and surpassed its long-term average.

The indices vary from 0 to 100, where a score exceeding 50 indicates a general increase compared to the previous month, and a score below 50 reflects an overall decrease.