India’s Manufacturing Growth Accelerates in October
India’s manufacturing sector gained significant momentum in October 2025, driven by robust domestic demand that helped offset a slowdown in export growth, according to the latest HSBC Manufacturing PMI survey.
Key Takeaways
- Manufacturing PMI rose to 59.2 in October from 57.7 in September
- Output growth matched the strongest pace in five years
- Output price inflation remained at 12-year high despite easing input costs
- Employment grew for the 20th consecutive month
Strong Domestic Demand Fuels Expansion
The HSBC India Manufacturing Purchasing Managers’ Index, compiled by S&P Global, climbed to 59.2 in October, significantly above the 50-point mark that separates expansion from contraction. This exceeded the preliminary estimate of 58.4 and marked a substantial improvement from September’s 57.7 reading.
Production growth accelerated to match the joint-strongest pace in five years, equaling the performance seen in August. Manufacturers attributed the increased output to strong domestic demand, efficiency improvements, new client acquisitions, and technology investments.
Export Growth Slows While Prices Remain High
Despite the overall positive performance, international sales growth weakened during October. New export orders increased at their slowest rate in 10 months, though the expansion remained substantial.
Notably, output charge inflation maintained its highest level in nearly 12 years for the second consecutive month, even as input cost inflation eased to an eight-month low. Companies reported passing on higher freight and labor costs to customers, with strong domestic demand enabling them to sustain elevated pricing.
“Robust end-demand fuelled expansions in output, new orders, and job creation. Meanwhile, input prices moderated in October while average selling prices increased as some manufacturers passed on additional cost burdens to end-consumers,” said Pranjul Bhandari, chief India economist at HSBC.
Employment and Business Outlook
Employment in the manufacturing sector rose for the 20th consecutive month as companies hired additional staff to manage increased workloads. However, the pace of job creation remained moderate and similar to September’s level.
Business optimism, while slipping from its seven-month high in September, remained robust. The future output sub-index indicated continued positive sentiment among manufacturers.
“Looking ahead, future business sentiment is strong due to positive expectations around GST (goods and services tax) reform and healthy demand,” added Bhandari.
