India’s manufacturing sector kicked off 2025 with robust momentum, as the Purchasing Managers’ Index (PMI) surged to 56.9 in February, marking the highest reading in four months. This uptick from January’s 55.4 signals a vibrant recovery driven primarily by surging domestic orders.
S&P Global’s latest data highlights how strong local demand fueled a sharp rise in new business and production levels. Manufacturers reported the quickest output expansion since October, outpacing long-term averages and reflecting improved operational efficiencies.
HSBC Chief India Economist Pranjul Bhandari noted the sustained acceleration in production for the second straight month, crediting robust homegrown orders. ‘February brought accelerated manufacturing activity,’ she said, underscoring the sector’s resilience amid global headwinds.
While domestic strength shone bright, export orders showed signs of fatigue. Growth in overseas demand slowed to its weakest pace in 17 months, edging closer to the long-term average. This dip, ongoing since mid-2024, slightly curbed hiring momentum in the sector.
Companies attributed the new order boom to aggressive marketing, rising customer needs, and favorable market conditions. Production gains stemmed from capacity enhancements, tech investments, and a surge in workloads.
Input costs rose at a moderate clip, similar to January, allowing firms to pass on pressures through higher output prices that exceeded historical norms. External sales picked up from regions like Asia, Europe, the Middle East, and the US, but not enough to offset the export slowdown.
The PMI, a composite gauge of orders, output, employment, supplier delivery times, and inventories, paints an optimistic picture for India’s industrial engine. As domestic consumption powers ahead, the sector appears poised for continued strength in the coming months.