April PMI Hits 10-Month High, Hints at Global Production Shift

India's manufacturing sector reached a 10-month high in April 2025 after showing a marginal improvement of 58.2 from 58.1 in the last month, showed the HSBC India Manufacturing Purchasing Managers’ Index (PMI) data compiled by S&P Global on Friday. This improvement follows after PMI dipped to a 14-month low of 56.3 in February, due to a slowdown in output, new orders and input purchasing.

PMI readings above 50.0 indicate growth in activity, while those below that level point to a contraction, Reuters reported. Because it offers early insights into economic activity and business sentiment, the PMI is widely tracked by investors, companies, and policymakers to gauge economic direction and momentum.

"The notable increase in new export orders in April may indicate a potential shift in production to India, as businesses adapt to the evolving trade landscape and US tariff announcements," said Pranjul Bhandari, chief India economist at HSBC.

"Manufacturing output growth strengthened to a ten-month high on robust orders. Input prices increased slightly faster, but the impact on margins could be more than offset by the much faster rise in output prices, of which the index jumped to the highest level since October 2013," she added.

Manufacturing output grew at its fastest pace since June 2024, led by a strong performance from consumer goods producers, who saw the sharpest rise among all sectors surveyed.

New orders continued to rise steadily, maintaining momentum near the eight-month high recorded in March.

Export demand also remained strong, with international orders expanding at the second-highest rate in more than 14 years — surpassed only by the spike seen in January. Survey participants cited higher sales to customers across global markets.

The hiring pace also accelerated from March, with both permanent and temporary contracts being offered. About 9% of surveyed manufacturers hired more workers to meet rising demand.

Industrial Growth Inches Up

India's Index of Industrial Production (IIP) grew by 3% year-on-year in March 2025.  The number showed a recovery from the six-month low of 2.9% recorded in February. In March, the IIP was at 164.8, up from 160.0 a year earlier. Manufacturing sector has the largest weight in IIP as it increased 3%, slightly higher from 2.9% in February. And