India's factory growth climbs to 7-month high on surging demand, PMI shows

India's manufacturing sector experienced a significant rebound in September, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) climbing to 55.1, marking the highest growth in factory activity in seven months. The PMI, which is above 50.0, indicates growth in the sector. New orders surged at the fastest pace since February, driven by increased demand for electronic, food, pharmaceutical, and textile products.

Export orders also accelerated, with manufacturers citing heightened demand from clients in Brazil, Europe, the UAE, and the US. Output rose sharply, with the rate of expansion accelerating to its strongest since May, supported by new business orders and high demand. Employment expanded at its strongest rate since May, recovering from a decline in August.

Business confidence rose to a four-month high, buoyed by new enquiries and expectations of sustained demand. However, input cost inflation rose at a faster pace than in August, driven by higher prices for electronic components, pharmaceutical items, and steel, though it remained below its long-run average. Selling prices increased modestly, also below trend.

The Reserve Bank of India (RBI) is expected to raise interest rates by a total of 50 basis points this year to 5.75% to tackle rising inflation.

Brief written by urgent.news from Business Recorder's own syndicated text. Machine-written — may contain errors; check the original before relying on it.