THEBUSINESSBYTES
BUREAU
NEW
DELHI, OCTOBER 1, 2026
India’s manufacturing
sector regained momentum in September, with activity expanding at its fastest
pace in seven months, as robust domestic and export demand drove a sharp
increase in new orders and output, a monthly survey showed on Thursday.
The seasonally
adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) climbed more
than two points to 55.1 in September from 52.8 in August, signalling a strong
improvement in operating conditions across the sector. The latest reading
marked the strongest expansion in manufacturing activity since February.
The upturn was led by
a sharp acceleration in new business, with new orders growing at their fastest
pace since February. Demand strengthened across several key segments, including
electronics, food, pharmaceuticals and textiles, according to the survey.
Export demand also
gathered pace during the month, with manufacturers reporting stronger orders
from clients in Brazil, Europe, the UAE and the US. The pickup in both domestic
and overseas demand helped push factory output higher, with the rate of
expansion accelerating to its strongest level since May.
The improvement in
business conditions also translated into stronger hiring. Manufacturing
employment expanded at its fastest pace since May, reversing an outright
decline recorded in August. The fall in factory employment in August had marked
the first contraction in two-and-a-half years.
Business sentiment
strengthened alongside the recovery in demand. Manufacturers’ confidence rose
to a four-month high in September, supported by an increase in new enquiries
and expectations that demand would remain resilient in the months ahead.
However, the recovery
came against a backdrop of rising cost pressures. Input price inflation
accelerated from August, driven by higher prices for electronic components,
pharmaceutical products and steel. Despite the increase, the pace of input-cost
inflation remained below its long-run average.
Manufacturers also
raised selling prices during the month, although the increase was modest and
remained below the historical trend.
The latest manufacturing data comes as policymakers continue to monitor inflationary pressures. Consumer inflation remained above the Reserve Bank of India’s 4 per cent medium-term target for the third consecutive month in August, with higher energy and food costs contributing to the increase.
Against this backdrop, expectations of monetary policy tightening have gained traction, with the RBI expected to raise interest rates by a cumulative 50 basis points this year to 5.75 per cent, according to the survey input.
