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The HSBC India Manufacturing Purchasing Managers’ Index rises to 59.1 in July from 58.4 in June, well above the 50-mark separating growth from contraction.
India Manufacturing PMI: New orders increase at the fastest pace in nearly five years, buoyed by favourable market conditions and marketing efforts.
PMI Manufacturing For July 2025: India’s manufacturing activity grew at its fastest pace in 16 months in July 2025, boosted by strong demand and robust new orders, according to a private survey released on Friday.
The HSBC India Manufacturing Purchasing Managers’ Index, compiled by S&P Global, rose to 59.1 in July from 58.4 in June, slightly below a preliminary reading of 59.2. The index remained well above the 50-mark separating growth from contraction.
Growth was driven by a sharp surge in new orders, which rose at the fastest rate in nearly five years, thanks to “favourable market conditions and effective marketing efforts”. This, in turn, pushed output growth to a 15-month high.
International demand also contributed, though export order growth moderated after hitting a 17-year high in June.
However, despite the robust performance, business confidence dipped as companies cite mounting competition and inflation concerns as key challenges. Business confidence among manufacturers dropped to a three-year low.
The level of optimism among manufacturers fell to its lowest since July 2022, with many companies highlighting mounting competition and inflation concerns as key challenges.
Adding to the caution, a recent Reuters poll of independent economists flagged persistent concerns over job creation. Although the official unemployment rate stood at 5.6% in June, some economists have raised questions over the methodology used in the government’s labour data.
Inflation pressures also re-emerged in July. Input costs rose more sharply as firms faced higher prices for certain raw materials. Companies responded by raising selling prices for the 10th consecutive month, taking advantage of strong demand to pass on cost pressures.
The Reserve Bank of India (RBI) is expected to keep the key repo rate at 5.50% in its upcoming meeting. However, any acceleration in inflation could prompt a re-evaluation of the current monetary stance.
Further uncertainty looms on the trade front as US President Donald Trump is set to impose 25% tariffs on Indian goods starting Friday, a move that could weigh on the country’s export performance in the coming months.
(With inputs from Reuters)
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