India's Manufacturing Sector Sees Significant Growth

Growth momentum in India's manufacturing sector improved significantly in April, with output increasing at the fastest pace since June 2024. This surge is largely attributed to the fastest upturn in exports in 14 years, potentially influenced by a global shift in production towards India amidst ongoing trade tensions.

PMI Indicates Strong Sector Health

The HSBC India Manufacturing Purchasing Managers' Index (PMI) slightly rose from 58.1 in March to 58.2 in April, marking the strongest improvement in the sector's health in ten months. A reading above 50 indicates expansion, highlighting the sector's robust performance.

Consumer Goods Lead the Expansion

Sub-sector data revealed that consumer goods makers registered the fastest increase, driven by a sharp rise in new business. Manufacturers reported better domestic and international demand, with new business from overseas growing to the greatest extent in over 14 years at the start of the 2025-26 fiscal year.

Global Demand Fuels Growth

Key areas contributing to robust demand include Africa, Asia, Europe, the Middle East, and the Americas. "The notable increase in new export orders in April may indicate a potential shift in production to India, as businesses adapt to the evolving trade landscape and US tariff announcements," said Pranjul Bhandari, chief India economist at HSBC.