India Manufacturing PMI Rises to 54.7 in April, But Growth Remains Among Weakest in 4 Years: HSBC

India’s manufacturing activity ticked up in April, but the pace of improvement remained subdued, reflecting a sector that is expanding but under visible strain from inflation and uneven demand, according to the latest HSBC survey.

The HSBC India Manufacturing PMI rose to 54.7 in April from 53.9 in March, signalling continued expansion. However, the reading still marked the second-slowest improvement in operating conditions in nearly four years, underscoring a loss of momentum despite incremental gains.

Growth in new orders and output picked up compared with the previous month, but both indicators remained among their weakest levels since 2022. The report noted that while advertising efforts and underlying demand resilience supported activity, competitive pressures, the ongoing West Asia conflict, and hesitation among clients to approve quotations weighed on overall growth.

“The two largest sub-components of the PMI, new orders and output, rose since March but trailed readings seen in at least three-and-a-half years,” the report said.

Exports emerged as a relative bright spot. New export orders expanded at the fastest pace since September, with firms reporting stronger demand from markets including Australia, France, Japan, mainland China and the United Kingdom.

At the same time, inflationary pressures intensified. Input costs rose at the fastest rate in 44 months, while output prices increased at their quickest pace in six months, driven by higher prices for aluminium, chemicals, fuel, leather and other key inputs. The overall rate of inflation climbed to its highest level since August 2022, forcing manufacturers to raise selling prices to protect margins.

Pranjul Bhandari, Chief India Economist at HSBC, said the data reflects growing spillovers from geopolitical tensions. “India’s manufacturing PMI rose to 54.7 in April, but still marked the second-slowest improvement in nearly four years. Spillovers from the Middle East conflict are becoming more evident, particularly through inflation,” she said.

Despite cost pressures, firms stepped up hiring, with job creation reaching a ten-month high as companies pushed ahead with expansion plans. However, inventory growth remained cautious, rising at the slowest pace in nearly five years.

Supply chains showed signs of improvement, with delivery times shortening due to better coordination with suppliers — a trend described as historically strong for the period.

While business sentiment eased slightly from March, it remained relatively elevated, supported by expectations that marketing efforts and pending project approvals would drive future growth.

Taken together, the data points to a manufacturing sector that continues to grow, but with momentum tempered by rising costs and lingering uncertainty.

(With inputs from ANI)