The HSBC India Manufacturing Purchasing Managers’ Index (PMI) for February 2025 fell to 56.3, marking a 14-month low from the previous month’s 57.7. Despite this slowdown, the sector remained in expansion mode, driven by strong domestic and international demand.
Business conditions continued to improve across the consumer, intermediate, and investment goods sectors, with manufacturers increasing purchasing activity and hiring more workers. However, the rate of output and sales growth eased to the lowest level since December 2023.
New export orders remained strong, albeit at a slightly slower pace than January’s near 14-year high. Meanwhile, input cost inflation softened for the third consecutive month, reaching its lowest in a year.
Economists expect business confidence to remain robust, with nearly one-third of surveyed manufacturers anticipating higher output volumes in the year ahead. The HSBC report highlighted that India’s manufacturing sector is still on solid footing despite the moderation in growth.
Pranjul Bhandari, Chief India Economist at HSBC, said: “India recorded a 56.3 manufacturing PMI in February, down slightly from 57.7 during the prior month, but still firmly within expansionary territory. Robust global demand continued to boost growth in the Indian manufacturing sector, which increased its purchasing activity and employment. Business expectations also remained very strong, with nearly one-third of survey participants foreseeing greater output volumes in the year ahead. Although output growth slowed to the weakest level since December 2023, overall momentum in India’s manufacturing sector remained broadly positive in February.”
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