India’s factory output hits 10-month high as exports surge

India’s manufacturing sector grew at its fastest pace in 10 months this April, driven by strong export demand and rising output, even as firms pushed up prices at a rate not seen in over a decade, according to a private survey.

The HSBC India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, edged up to 58.2 from 58.1 in March. While slightly below the preliminary estimate of 58.4, the reading remained well above the 50.0 threshold that separates growth from contraction.

According to Pranjul Bhandari, chief India economist at HSBC, the sharp rise in new export orders in April may reflect a shift in global supply chains towards India, particularly in response to recent changes in trade policy and US tariffs.

Manufacturing output posted its strongest expansion since June 2024, with consumer goods leading the way among the sectors surveyed.

New orders continued to grow at a pace similar to March, remaining close to an eight-month high. Export demand was particularly strong, with orders increasing at the second-highest rate recorded in more than 14 years, behind only January’s peak. Manufacturers reported higher sales to international clients across diverse markets.

Hiring also gained momentum, with firms expanding their workforce by offering both temporary and permanent roles. This hiring trend supported increased capacity as demand surged.

At the same time, businesses raised selling prices at the sharpest rate since October 2013, passing on higher costs to consumers. Input cost inflation, while slightly up, remained moderate. Analysts noted that the rapid increase in output prices likely more than compensated for any rise in input costs.

Business sentiment stayed upbeat, with more than 30% of surveyed manufacturers expecting output to rise over the next 12 months.

Source: Economic Times