THEBUSINESSBYTES BUREAU

NEW DELHI, MAY 4, 2026

India’s manufacturing sector showed renewed strength in April, with the Purchasing Managers’ Index (PMI) rising to 54.7 from 53.9 in March, driven by steady gains in output, new orders and employment, according to the latest HSBC Flash India PMI data released on Monday.

The uptick signals continued resilience in factory activity, even as the pace of expansion remained among the slowest seen since 2022. April marked a mild recovery in both production and new business inflows, though growth levels were still the second-weakest in nearly two years, reflecting a cautious demand environment.

Exports emerged as a key bright spot, registering their fastest growth since September last year, lending support to overall manufacturing momentum. However, escalating geopolitical tensions, particularly the ongoing conflict in the Middle East, cast a shadow on cost structures, pushing inflationary pressures higher.

Input costs rose at their sharpest pace in 44 months, while output prices increased at the fastest rate in six months, indicating that manufacturers are passing on part of the cost burden to consumers.

Despite the headline PMI improvement, the broader measure of operating conditions pointed to the second-slowest expansion in nearly four years. Survey respondents attributed this moderation to competitive market dynamics, client hesitancy in approving pending orders, and external uncertainties linked to geopolitical developments.

At the same time, domestic demand remained relatively supportive, aided by sustained marketing efforts and underlying consumption resilience. Firms reported that advertising initiatives helped bolster sales and production, partially offsetting the drag from cautious client behaviour.

Encouragingly, manufacturers continued to express optimism about future growth prospects, with business confidence staying near recent highs. Although sentiment eased slightly from March levels, it remained the second-strongest since November 2024, underpinned by expectations of improved order conversions and project approvals in the coming months.

Another positive development was a marked improvement in supplier performance. Companies reported shorter input lead times, attributing this to better coordination with both new and existing suppliers. The extent of this improvement was described as historically strong, suggesting easing supply-side constraints.