India’s Manufacturing PMI rose to 59.2 in October from 57.7 in September, signaling renewed expansion driven by GST relief, productivity gains, and tech advancements.
Rising Orders & Inflation Trends: Strong domestic demand boosted new orders, output, and job creation, while output charge inflation stayed at a 12-year high even as input costs eased.
Upbeat Outlook: Despite global headwinds and US tariffs, manufacturers remain optimistic, increasing raw material purchases and expecting sustained demand and policy support.
India’s Manufacturing PMI Rises In October Amid GST Relief And Tech Demand
According to the survey, manufacturers continued to purchase additional raw materials and semi-finished items in October, reportedly to supplement production and add to their inventories
Summary
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India’s manufacturing sector showed signs of recovery in October after falling to a four-month low in September. The recovery is boosted by the recent relief in Goods and Services Tax (GST), which came into effect on September 22, along with improvement in productivity and increased technology advancement, the HSBC India Manufacturing Purchasing Managers’ Index showed.
The PMI data, compiled by S&P Global, rose to 59.2 in October from 57.7 in September. A PMI reading above 50 indicates expansion of the sector, while a reading below 50 indicates contraction. According to the survey, a sharper rise in new orders fuelled stronger growth in output and purchasing activity, leading to a “near-record expansion” in input inventories. However, external sales rose at the slowest pace in 10 months, hinting at easing external demand.
Output charge inflation remained at a 12-year high for the second consecutive month despite cooling input cost inflation. “Robust end-demand fuelled expansions in output, new orders, and job creation. Meanwhile, input prices moderated in October, while average selling prices increased as some manufacturers passed on additional cost burdens to end consumers,” said Pranjul Bhandari, Chief India Economist at HSBC.
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US Tariffs Continue To Weigh On Indian Manufacturers
India’s manufacturing sector has been weighed down by a series of reciprocal and punitive tariffs. “Regarding the outlook, manufacturers attributed positive expectations to GST reform, expanded capacities, and marketing efforts,” the survey said. “They also predicted demand resilience and hope that pending contracts will be approved.”
Upbeat Forecast
S&P Global signaled that Indian companies continued to show upbeat forecasts for production, Mint reported. According to the survey, manufacturers continued to purchase additional raw materials and semi-finished items in October, reportedly to supplement production and add to their inventories. The survey noted that the rise in input purchasing was due to easing cost inflation. India’s retail inflation cooled to 1.54% in September. The latest retail inflation print for October will be released next week.
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