India’s Factory Growth Climbs To 7-Month High On Surging Demand: PMI Data | Economy News

Last Updated:October 01, 2026, 11:14 IST

The HSBC India Manufacturing PMI, compiled by S&P Global, jumps to 55.1 in September from a five-year low of 52.8 in August but was lower than a preliminary estimate of 55.7.

Business confidence rose to a four-month high in September with optimism buoyed by new enquiries and expectations of sustained demand.

India’s manufacturing sector expanded sharply in September, ending a three-month slowdown as robust demand drove the fastest growth in factory activity in seven months, revived hiring and lifted business confidence, a private survey showed on Thursday.

The HSBC India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, jumped to 55.1 in September from a five-year low of 52.8 in August but was lower than a preliminary estimate of 55.7. The reading was the highest since February.

A PMI reading above 50.0 indicates growth in activity.

New orders rose at the fastest pace since February, driven by stronger demand for electronic, food, pharmaceutical and textile products, the survey said. Export orders also accelerated, with manufacturers citing increased demand from clients in Brazil, Europe, the UAE and the US.

Output rose sharply, with the rate of expansion accelerating to its strongest since May, supported by new business orders and high demand.

“Companies bought more materials and built up stocks to prepare for anticipated sales. Finished-goods inventories recorded their second-largest increase in nearly 12 years, signalling a clear shift from leaner stock levels,” said Pranjul Bhandari, chief India economist at HSBC.

Rising demand also led to a resumption in hiring. Employment expanded at its strongest rate since May, recovering from an outright decline in August – the first drop in factory jobs in two-and-a-half years.

Business confidence rose to a four-month high in September with optimism buoyed by new enquiries and expectations of sustained demand.

Cost pressures rose, with input cost inflation rising at a faster pace than in August, driven by higher prices for electronic components, pharmaceutical items and steel. However, the rate of inflation remained below its long-run average. Selling prices also increased from August, though the pace was modest and similarly below trend.

Inflation has remained above the Reserve Bank of India’s (RBI) 4% medium-term target for the third consecutive month in August, driven by a sharp increase in energy and food costs. To tackle rising inflation, the RBI is expected to raise interest rates by a total of 50 basis points this year to 5.75%.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – Reuters)

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What caused India’s factory growth to reach a 7-month high in September?

India’s manufacturing sector expanded sharply in September due to robust demand, which drove the fastest growth in factory activity in seven months, revived hiring, and lifted business confidence.

How did the HSBC India Manufacturing PMI perform in September?

The HSBC India Manufacturing Purchasing Managers’ Index jumped to 55.1 in September from a five-year low of 52.8 in August, marking its highest reading since February.

What are the expectations for the Reserve Bank of India’s interest rates?

To tackle rising inflation that has stayed above its 4% target, the Reserve Bank of India is expected to raise interest rates by a total of 50 basis points this year to reach 5.75%.

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