India’s manufacturing activity grew at the fastest pace in four months in February as strong domestic demand boosted new orders and output, but export growth slowed to the slowest rate in nearly a year and a half.
The HSBC India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 56.9 in February from 55.4 in January, but below the initial estimate of 57.5. A PMI above 50 indicates expansion.
“India’s manufacturing PMI showed a pick-up in manufacturing activity in February. Output grew at a faster pace for the second consecutive month, supported by strong domestic orders,” said Pranjul Bhandari, chief India economist at HSBC. “However, the slowing trend in growth in new export orders continued beginning in mid-2025, limiting job creation in the manufacturing sector to some extent.”
The overall result shows that India’s economy is expected to remain resilient this quarter after a 7.8% growth in October-December, helped by a 13.3% growth in manufacturing. For the fiscal year ending March 2026, the South Asian economy is expected to grow 7.6%.
india manufacturing pmi
However, the area of concern is outbound trade. New export orders grew at the slowest pace in 17 months, suggesting US tariff uncertainty remains despite the recent trade deal with India.
The survey was conducted between February 9 and February 23 when US tariffs on Indian goods were reduced from 50% to 18%. Last week, President Donald Trump announced new global tariffs following the Supreme Court’s move to strike down some tariffs.
By contrast, new orders – a key gauge of demand – grew at their strongest pace since October, while production volumes expanded at the fastest rate in four months, helped by efficiency gains, solid demand and technology investment, the companies said. Input cost inflation remained moderate and unchanged from January, but manufacturers raised their selling prices at the fastest rate in four months as strong demand allowed them to pass on increased costs.
Employment rose to a four-month high, but only modestly. Only 4% of companies reported hiring, while most reported no change in headcount.
Confidence about the year ahead has reached a four-month high, indicating a strong economic growth outlook despite weak external demand.