India’s manufacturing sector strengthened in September 2026, with the HSBC India Manufacturing Purchasing Managers’ Index rising to 55.1 from 52.8 in August, according to S&P Global. The reading was the highest in seven months and reflected stronger domestic demand, faster export growth and higher factory output.
A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction.
New Orders and Exports Improve
New orders increased at a faster pace during September as demand improved across sectors including electronics, food, pharmaceuticals and textiles.
Export orders also strengthened, with manufacturers reporting higher demand from markets such as Brazil, Europe, the United Arab Emirates and the United States.
The stronger order flow helped lift production to its fastest pace in four months.
Production and Hiring Pick Up
Factory output accelerated during the month, led by intermediate goods producers. Growth in the capital goods segment remained positive but was comparatively modest.
Manufacturers also resumed hiring after employment declined in August. Job creation rose to its strongest level since May as companies responded to stronger production requirements and improving demand.
Inventories Rise as Firms Prepare for Higher Sales
Companies increased purchases of raw materials and built inventories in anticipation of stronger sales.
Finished-goods stocks recorded their second-largest increase in nearly 12 years, indicating that manufacturers were preparing for continued demand rather than simply meeting current orders.
Business Confidence Reaches Four-Month High
Manufacturing sentiment improved alongside the stronger operating environment.
Business confidence rose to a four-month high as companies cited new enquiries and expectations of favourable demand conditions in the months ahead.
The improvement in sentiment was accompanied by stronger orders, higher output and renewed hiring.
Cost Pressures Increase Moderately
Input costs rose during September, with manufacturers reporting higher prices for electronic components, pharmaceutical products and steel.
Companies increased selling prices at a faster pace in response, although both input and output inflation remained modest by historical standards.
Manufacturing Ends the Quarter on a Stronger Note
The rise in the manufacturing PMI to 55.1 points to a clear improvement in factory conditions at the end of the quarter.
Stronger demand, faster production, renewed hiring and higher business confidence combined to give Indian manufacturing a firmer footing entering the next quarter.
References
S&P Global Market Intelligence — HSBC India Manufacturing PMI
https://www.pmi.spglobal.com/Public/Release/PressReleases
S&P Global Market Intelligence — PMI Release Calendar
https://www.pmi.spglobal.com/Public/Release/ReleaseDates
S&P Global Market Intelligence — Purchasing Managers’ Index Portal
https://www.pmi.spglobal.com/Public/Home/Index
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