Is India's Manufacturing PMI Reaching New Heights Amid Global Challenges?
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Synopsis
India's manufacturing sector achieved a significant milestone in July, with the PMI soaring to a remarkable 16-month high of 59.1. This growth occurred despite global economic uncertainties and U.S. tariffs. Discover the factors driving this momentum and what it means for India’s economic future.
Key Takeaways
- India's PMI surged to 59.1, a 16-month high.
- Strong growth in new orders and output contributed to this rise.
- Business confidence has decreased due to inflation concerns.
- India's GDP growth forecast is 6.4 percent for FY26 and FY27.
- Employment is increasing, particularly in the service sector.
New Delhi, Aug 1 (NationPress) India’s manufacturing industry saw a notable improvement in July as the Purchasing Managers’ Index (PMI) surged to a 16-month peak of 59.1, up from 58.4 in June, despite facing global uncertainties and U.S. tariffs, according to data released by S&P Global on Friday.
The HSBC India Manufacturing Purchasing Managers’ Index (PMI) achieved a 16-month high of 59.1, driven by robust increases in new orders and production, although business sentiment and hiring showed signs of slowing.
“India recorded a 59.1 manufacturing PMI in July, a rise from 58.4 the previous month, marking a 16-month high propelled by significant growth in new orders and output,” stated Pranjul Bhandari, chief India economist at HSBC.
“However, business confidence dipped to its lowest point in three years due to worries about competition and inflation,” Bhandari noted.
India’s manufacturing sector appears to be on solid ground as it enters the latter half of FY25.
This sustained manufacturing strength is supported by strong domestic demand and ongoing production expansion.
India's private sector experienced substantial growth in July, driven by robust manufacturing and global demand. The headline HSBC Flash India Composite PMI Output Index, compiled by S&P Global, increased to 60.7 in July from 58.4 in June.
International orders received by private sector firms in India surged at the start of the second fiscal quarter (Q2 FY26). Indian companies remain optimistic about output growth over the next year.
There is a noticeable increase in employment, particularly within the service sector, indicating that healthy job creation accompanies the growth of both India’s manufacturing and service sectors.
In addition, India is anticipated to experience 6.4 percent GDP growth in FY26 and FY27, with both projections slightly revised upward, reflecting a more favorable external environment than previously assumed in the April reference forecast, according to the International Monetary Fund’s (IMF) World Economic Outlook (WEO).
The IMF has adjusted its outlook for India’s GDP growth for the current fiscal year by 20 basis points (bps) to 6.4 percent. The global agency also increased its growth forecast for FY27 by 10 bps to 6.4 percent.
Point of View
It is essential to recognize that despite the challenges posed by global economic uncertainties, India's manufacturing sector is displaying remarkable resilience. This growth is not just a statistic; it reflects the ongoing domestic demand and robust output that can drive future development.
NationPress
05/10/2025
Frequently Asked Questions
What is the current PMI for India's manufacturing sector?
India's manufacturing PMI rose to a 16-month high of 59.1 in July, up from 58.4 in June.
What factors contributed to the rise in PMI?
The increase in PMI was driven by strong gains in new orders and output, despite concerns over competition and inflation.
How does this impact India's GDP growth?
The IMF projects India's GDP growth at 6.4 percent for FY26 and FY27, indicating a favorable outlook.
What does the PMI indicate about business sentiment?
While the PMI is high, business confidence has dipped to the lowest level in three years due to competitive and inflationary pressures.
Are there job creation opportunities in India?
Yes, there is a notable increase in employment, especially in the service sector, which suggests healthy job creation.
