India’s Manufacturing PMI Hits 16-Month High Amid Strong July Demand

New Delhi | August 1, 2025

India’s manufacturing sector surged in July, with the HSBC India Manufacturing Purchasing Managers’ Index (PMI) rising to 59.1, the highest level in 16 months, according to data released by S&P Global. This sharp uptick from June’s 58.4 reflects robust gains in new orders and factory output, although job creation and business sentiment remain under pressure.

Highlights:

• PMI climbs to 59.1 in July, up from 58.4 in June indicating strong sector health
• Factory orders hit near 5-year high due to strong domestic demand and better marketing
• Output growth highest in 15 months, led by intermediate goods
• Business confidence drops to a 3-year low over inflation and competition worries
• Hiring slows: 93% of surveyed firms reported no new recruitments
• Selling prices rise faster than input costs, reflecting strong pricing power
• Inventory restocking continues, supported by improved vendor performance

Expert Insight:

“India recorded a 59.1 manufacturing PMI in July, up from 58.4 during the prior month. This marked a 16-month high for the sector, which benefited from strong growth in new orders and output,”

Pranjul Bhandari, Chief India Economist, HSBC

However, she noted that business confidence is weakening, and the employment index is at its lowest since November 2024, hinting at future uncertainties.

The Bottom Line:

India’s manufacturing growth is on a solid path heading into the second half of FY25. But sluggish hiring, falling confidence, and inflationary risks could pose headwinds in sustaining this momentum.