India’s manufacturing activity continued to expand in December, although the pace of growth moderated, with the HSBC Manufacturing Purchasing Managers’ Index (PMI) slipping to a 38-month low of 55.0 from 56.6 in November, according to data released by S&P Global Market Intelligence.
Despite the decline, the PMI remained well above the 50 mark that separates expansion from contraction, indicating sustained improvement in operating conditions across the sector.
“Even with growth momentum easing, India’s manufacturing industry wrapped up 2025 in good shape,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence. She noted that higher new business inflows could support activity in the final quarter of the fiscal year, while muted inflationary pressures may continue to underpin demand.
The survey pointed to a loss of growth momentum across several indicators toward the end of 2025. New business and output both continued to rise, but at slower rates amid heightened competition and softer sales of certain products. Employment increased at the slowest pace in the current 22-month period of job creation, while growth in purchasing activity was the weakest in two years.
New orders expanded at a sharp pace, although this marked the weakest increase since December 2023. Output growth eased to its slowest rate since October 2022, partly reflecting a moderation in international demand. New export orders rose at the slowest pace in 14 months, with manufacturers citing demand mainly from Asia, Europe and the Middle East.
In response to the slower rise in new work, firms scaled back input purchases, though overall buying activity remained in expansion territory. Employment growth was marginal, suggesting limited pressure on capacity.
On the cost front, input prices rose again in December due to higher costs of materials such as bamboo, chemicals, glass, leather and packaging. However, input cost inflation stayed below its long-term average, while output price inflation softened to a nine-month low, providing some relief to manufacturers and supporting demand.
