The HSBC Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 55.1 in September from 52.8 in August. It was 57.7 in September 2025. A reading above 50 indicates expansion, while one below signals contraction. Strong demand for electronic, food, pharmaceutical and textile products drove a faster increase in new business, according to the survey. The rise in total sales was the fastest since February.
“India’s factory sector ended the quarter on a firmer footing. The PMI rose in September as stronger domestic and overseas demand lifted sales and production,” said Pranjul Bhandari, chief India economist at HSBC. Manufacturers also raised their output expectations, with overall business sentiment rising to a four-month high. Survey respondents cited a pipeline of new inquiries and expectations of continued favourable demand conditions as key reasons.
Intermediate goods emerged as the strongest-performing segment of India’s manufacturing sector in September, leading growth in both new orders and output. Capital goods was the weakest-performing segment, recording only modest increases that were slower than in August.
New export orders also expanded at a faster pace, with panel members reporting gains from Brazil, Europe, the UAE and the US. “This pick-up in demand momentum spurred the sharpest expansion in Indian factory production for four months,” the survey said.
Job growth
Employment growth resumed in September after a brief slowdown in August. “Hiring resumed at its fastest pace since May, and manufacturers became more optimistic about the months ahead,” said Bhandari.
Anticipating strong future sales, companies also increased their inventories by purchasing more raw materials. “Companies bought more materials and built up stocks to prepare for anticipated sales,” said Bhandari.