According to a monthly survey released on Tuesday, India's manufacturing sector development reached a 16-year high in March thanks to the biggest rise in output and new orders since October 2020 and reports of robust market conditions. From 56.9 in February to a 16-year high of 59.1 in March, the seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) showed robust rise in new orders, production, and input inventories along with a resurgence in job creation.

According to the Purchasing Managers' Index (PMI), a score of less than 50 indicates contraction while a print over 50 indicates expansion. The manufacturing PMI for India increased in March to its highest point since 2008. In reaction to robust output and fresh orders, manufacturing firms increased their workforce. Input cost inflation increased in March due to robust demand and a minor tightening of capacity, according to HSBC economist Ines Lam.

In March, manufacturing production increased for the 33rd consecutive month and reached the highest level since October 2020. The consumer, intermediate, and investment goods sectors all saw faster growth. increased fresh job inflows from both the home and international markets. According to the poll, new export orders rose at their quickest rate since May 2022.

The fastest rate of rise in buy quantities since mid-2023—and among the greatest in over 13 years—occurred as businesses strove to accumulate inventory ahead of anticipated gains in sales.

In terms of employment, Indian manufacturers added more staff in March following two months in which payroll figures were almost stable. According to the report, the rate of employment growth was modest but the highest since September 2023. Cost pressures were at their greatest point in five months on the price front, even if they were still mild by historical standards. Businesses claimed to have paid more for steel, cotton, iron, plastics, mechanical tools, and iron. Nonetheless, product manufacturers that increased their prices to the lowest level in more than a year continued to place a high premium on keeping customers.

Companies were generally optimistic about the future of the Indian manufacturing industry; 28% anticipated increased output in the upcoming year, while 1% anticipated a decline. Overall morale was still high, but as worries about inflation impacted on confidence, it fell to a four-month low. S&P Global compiles the HSBC India Manufacturing PMI using purchasing managers' questionnaire responses in a panel of over 400 manufacturers.