In accordance with a private survey released on Monday, India's manufacturing industry expanded at the fastest rate this calendar year so far, owing to higher factory orders and output.

The S&P Global India Manufacturing Purchasing Managers' Index (PMI) increased to 57.2 in April from 56.4 the previous month, as all sub-components of the PMI contributed more to this month's figure.

"Production growth took another step forward in April, reflecting a robust and faster expansion in new orders." Companies benefited from relatively mild price pressures, improved international sales, and improved supply-chain conditions, according to Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.

"It seems like Indian manufacturers have abundant opportunities to keep powering ahead. Besides seeing the strongest inflow of new work in 2023 so far, capacities were expanded through job creation, input buying was lifted."

Both new orders and output increased at their fastest rates since December, allowing businesses to resume hiring in April after the first decline in 13 months in March.

In April, foreign demand expanded at the fastest rate in four months, and optimism increased.

"Manufacturers are certainly optimistic about growth prospects, with optimism rising from an eight-month low in March as a result of contracts pending approval, rising client enquiries, marketing initiatives, and evidence of demand resilience," De Lima said.

According to the survey, input costs rose faster in April, but improved demand allowed firms to pass some of that burden on to customers, implying that retail inflation is unlikely to slow significantly anytime soon.

"Although manufacturers signalled higher operating costs in April — linked to fuel, metals, transportation and some other raw materials — the overall rate of inflation remained below its long-run average despite quickening since March," the company said in a statement.