India's factory activity growth hits a six-month high, January Purchasing Managers' Index (PMI) at 57.7

India's factory activity showed robust growth at the start of 2025, reaching its fastest pace in six months in January, supported by resilient domestic and export demand. The HSBC India Manufacturing Purchasing Managers' Index (PMI) rose to 57.7 from 56.4 in December 2024, reflecting a solid expansion in manufacturing. New orders grew sharply, partly driven by robust export orders, which saw their fastest growth in 14 years. Output also hit a three-month high, boosting confidence among businesses, which responded by expanding their workforce at the strongest pace since March 2005. Easing inflationary pressures also helped, with input prices rising at their slowest pace in a year, enabling firms to increase selling prices gradually. 

This positive manufacturing data is a relief to India's economy, which has been facing a slowdown in growth due to weak consumption in recent quarters. The stronger manufacturing sector provides optimism for the country's outlook, especially with the Reserve Bank of India (RBI) expected to reduce its key repo rate to 6.25% following its upcoming meeting. Additionally, the Indian government’s recent budget cut in personal tax rates aims to stimulate domestic demand amid concerns about potential global economic challenges, such as new tariff barriers. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.