Has India’s manufacturing PMI eased to 55 in December, leaving the industry in ‘good shape’?
Synopsis
India's manufacturing sector shows continued growth with a PMI of 55 in December, signaling resilience despite a slowdown. As the industry wraps up 2025, favorable demand trends and new business opportunities suggest a bright outlook ahead. Could these factors keep the momentum going into the new fiscal year?
Key Takeaways
India's manufacturing PMI stands at 55 for December.
The PMI indicates continued expansion despite a slower growth rate.
Demand trends remain positive , helping to sustain business.
Manufacturers are optimistic about output increases in 2026.
Competitive pressures and market uncertainty are concerns for the sector.
Mumbai, Jan 2 (NationPress) The manufacturing sector in India continued to show growth in December, although at a reduced rate, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) slipping to 55 from 56.6 in November, according to a report released on Friday.
The report, prepared by S&P Global, indicated that despite the slowdown in growth, the HSBC India Manufacturing PMI remained above its long-term average, signaling that the industry is in a solid position as it concludes 2025.
It highlighted that strong demand has been a driving force behind significant increases in new business and production, though the pace of expansion has slowed due to competitive challenges and reduced sales of certain items.
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, commented, "Despite the easing of growth momentum, India's manufacturing sector is finishing 2025 on a positive note. The surge in new business intakes is expected to keep companies engaged as we enter the last fiscal quarter, and the absence of substantial inflationary pressures may continue to bolster demand.”
The increase in purchasing activity was the weakest seen in two years, and input costs have risen at a historically minimal pace, as noted in the report. The inflation rate for charges has dropped to a nine-month low, according to the research agency.
New work intakes increased sharply, although this was the weakest rate since December 2023. Similarly, production levels grew at the slowest rate since October 2022.
Pollyanna noted a consistent trend of softer growth in new export orders, with the number of companies reporting higher international sales in December reduced to half of the average for 2025.
“With Indian manufacturers experiencing less intense cost pressures than their counterparts globally, many are optimistic that competitive pricing can attract new business from other regions in the upcoming year,” Pollyanna added.
The report mentioned improved demand from clients in Asia, Europe, and the Middle East, with Indian manufacturers anticipating a rise in output in 2026.
It also pointed to advertising, favorable demand trends, and new product launches as positive factors for the outlook, although some companies expressed concerns regarding competitive pressures and market uncertainty.
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Point of View
It's crucial to recognize that while the manufacturing sector in India is experiencing a slowdown, it remains in a robust position. The resilience shown in 2025 is commendable, and the outlook for the coming year appears promising, provided that competitive pressures are managed effectively. Maintaining a focus on innovation and adaptability will be essential as we move forward.
NationPress
10 May 2026
Frequently Asked Questions
What does a PMI of 55 indicate for India's manufacturing sector?
A PMI of 55 indicates expansion in the manufacturing sector, although the pace of growth has slowed compared to previous months.
How does the current PMI compare to previous months?
The PMI decreased from 56.6 in November to 55 in December, indicating a moderation in growth.
What factors are influencing the manufacturing growth?
Positive demand trends, new business intakes, and minimal inflationary pressures are supporting growth, despite competitive challenges.
What are the expectations for the manufacturing sector in 2026?
Manufacturers anticipate an increase in output in 2026, driven by improved demand from international clients.
What challenges does the manufacturing sector face?
Challenges include competitive pressures and market uncertainty, which some companies have expressed concern over.
