Priyanka
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India's manufacturing sector showed strong growth in March 2025. The HSBC India Manufacturing Purchasing Managers’ Index (PMI) increased to 58.1, compared to 56.3 in February. A PMI score above 50 means expansion. This jump signals improved demand and strong sector health, above its long-term average.
Rebound From February Slowdown
In February, the PMI had dropped to a 14-month low due to slower growth in new orders and production. However, March saw a turnaround, largely driven by a rise in new factory orders. The new orders index performed well, lifting the overall PMI.
Increased Sales and Output
According to the survey, companies reported strong growth in total sales—the highest since July 2024. Businesses noted better customer interest and effective marketing as reasons behind the increase. This led to higher production levels at the end of the 2024-25 fiscal year.
Export Orders Rose, But at Slower Pace
New export orders continued to grow, although the pace was the slowest in the past three months. Companies highlighted positive demand from Asia, Europe, and the Middle East. Despite the slight dip in international orders, the overall demand momentum stayed solid.
Strong Demand Reduced Inventory
HSBC’s Chief India Economist, Pranjul Bhandari, noted that high demand forced companies to use existing inventory to meet customer needs. This caused the sharpest drop in finished goods stocks since January 2022.
How the Manufacturing Growth Helps India
Rapid growth in manufacturing supports the country in several ways:
Boosts exports and reduces import reliance
Strengthens the economy
Creates jobs and supports industrial innovation
Drives demand for logistics, transport, and services
