India's Manufacturing Surges to 8-Month High in March

According to the survey conducted by the seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index, the rise was driven by stronger new order growth, as the new orders index reached its highest level, supported by increased customer interest, favourable demand conditions, and successful marketing initiatives.
In February, India's manufacturing PMI fell to a 14-month low amid softer increase in new orders and production. In PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction. “March saw total sales expand to the greatest extent since July 2024, with companies remarking on positive customer interest, favourable demand conditions and successful marketing initiatives,” the survey noted.

Commenting on the survey, Pranjul Bhandari, chief India economist at HSBC, said that although international orders slightly slowed, overall demand momentum remained robust, and the new orders index recorded an eight-month high of 61.5. “Strong demand prompted firms to tap into their inventories, causing the fastest drop in finished goods stocks in over three years,” Bhandari said.
The survey also noted that firms scaled up production volumes at the end of the 2024/25 fiscal. “The rate of expansion was sharp, above its historical average and the strongest in eight months. Although new export orders continued to increase strongly in March, the pace of growth retreated to a three-month low. Panellists cited gains from Asia, Europe and the Middle East in terms of international sales,” it noted.

Buoyant demand, it said, led companies to tap into their inventories to meet increased client appetite, resulting in the most rapid decline in finished goods stocks since January 2022. “Going ahead, business expectations remained fairly optimistic, with around 30 percent of survey participants foreseeing greater output volumes in the year ahead, compared to less than 2 per cent that anticipate a contraction,” Bhandari said