India's manufacturing sector activity eased to a nine-month low in November, mainly owing to softer rise in sales and production amid reports of challenging market conditions, a monthly report said on Monday.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) falling to 56.6 in November from 59.2 in October, highlighted the slowest improvement in operating conditions since February.
In the Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.
1 December 2025
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"India's final November PMI confirmed that US tariffs caused the manufacturing expansion to slow," said Pranjul Bhandari, Chief India Economist at HSBC.
"Although companies suggested that the trend for international sales remained favourable – reflecting greater sales to clients in Africa, Asia, Europe and the Middle East – there was a mild loss of overall growth momentum," the report said.
On average, new export orders rose at the weakest pace in over a year.
"The new export orders PMI fell to a 13-month low. Business confidence, as indicated by expectations for future output, showed a big fall in November, potentially reflecting increasing concerns about the impact of tariffs," Bhandari said.
On November 28, Commerce Secretary Rajesh Agrawal said India is hopeful of reaching a framework trade deal with the US this year itself that should address the tariff issue to the benefit of Indian exporters.
Both countries have been in negotiations for a long time, and the first tranche of a bilateral trade deal was expected by the fall of 2025, but the Trump administration's imposition of tariffs on Indian exports has created hurdles.
While noting that the Bilateral Trade Agreement (BTA) will take time, Agrawal said India is engaged in protracted negotiations with the US on a framework trade deal that will address the reciprocal tariff challenge faced by Indian exporters.
"The boost from the cuts in goods and services tax (GST) may be fading, and it might be insufficient to offset the tariff headwind to demand," Bhandari noted.
On the price front, inflation rates receded in November, with input costs and selling charges rising at the slowest rates in nine and eight months respectively.
On the employment front, manufacturers in India adjusted their hiring efforts and purchasing activity in line with a slowdown in new order growth.
Employment expanded at the softest pace in the current 21-month period of uninterrupted growth, the report said.
Going ahead, companies remained confident of a rise in output over the coming 12 months, but positive sentiment fell to its lowest level in nearly three-and-a-half years.
"Downgraded forecasts stemmed from concerns around a competitive landscape, including competition from international firms, as anecdotal evidence showed," the report said.
The HSBC India Manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.
