Activity in the manufacturing sector in August 2025 expanded at the fastest rate in more than 17 years, propelled by a demand-driven rise in new orders and production, according to a private sector survey.
The HSBC India Manufacturing Purchasing Managers’ Index (PMI) climbed to 59.3 in August from 59.1 in July, indicating the “fastest improvement in operating conditions for 17-and-a-half years”, the report said.
The graphs included in the report show that India’s manufacturing PMI was last higher in mid-2008.
“Indian manufacturing growth gained further momentum in August, with ongoing improvements in demand continuing to underpin robust increases in factory orders and production,” the report added. “Companies upped the pace at which additional materials were bought, and more jobs were created, partly reflecting positive expectations regarding the outlook.”
It went on to explain that the uptick in the headline PMI figure reflected an acceleration in the growth of production volumes, which grew the quickest in close to five years.
“Incoming new orders rose to broadly the same extent as in July, which was the fastest in 57 months,” the report noted. “In addition to demand buoyancy, survey participants linked growth to advertising success.”
Notably, the report highlighted the fact that the underlying data showed a slower increase in international orders placed with Indian manufacturers, which grew at the slowest pace in five months.
“The increase of U.S. tariff on Indian goods to 50% might have contributed to the slight easing in new export orders growth, as American buyers refrain from placing orders in the midst of tariff uncertainty,” Pranjul Bhandari, Chief India Economist at HSBC, said.