India’s manufacturing PMI hits 17year high in August

India’s manufacturing sector hit a 17-year high in August, with the HSBC PMI rising to 59.3 on strong demand, higher output, job creation, and renewed business confidence.

India’s manufacturing sector gathered further momentum in August, with demand-led strength in factory orders and output pushing the Purchasing Managers’ Index (PMI) to its highest level in over 17 years.

The seasonally adjusted HSBC India Manufacturing PMI rose to 59.3 in August, up from 59.1 in July, marking the strongest improvement in operating conditions since February 2008. A reading above 50 signals growth, while anything below that level points to contraction.

Robust growth in new orders and production prompted companies to step up input purchases and hiring. Companies upped the pace at which additional materials were bought, and more jobs were created, partly reflecting positive expectations regarding the outlook, the report noted.

According to Pranjul Bhandari, chief India economist at HSBC, the surge was “driven by a rapid expansion in production.” She added that the recent hike in US tariffs on Indian goods to 50% may have weighed on export orders, as American buyers held back amid uncertainty.

The output sub-index registered its fastest pace of growth since late 2020, with manufacturers citing better alignment between supply and demand. New orders also remained strong, maintaining the brisk expansion seen in July — the quickest in nearly five years — supported by both resilient demand and marketing efforts.

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