India's Manufacturing Growth Eases Slightly From August High

According to a preliminary flash reading, the HSBC India Manufacturing PMI fell to 58.5 in September, down from August’s 17-year high of 59.3. Despite the slight moderation, the index remains comfortably in growth territory, with every reading above 50.0 indicating growth in manufacturing activity.

“The imposition of the 50-percent tariff rate by the U.S. on India likely resulted in a slower rise in new export orders over Aug.-Sep.,” Pranjul Bhandari, Chief India Economist at HSBC said, adding that the effect of higher tariffs had been partly offset by growing domestic demand due to lower goods and services tax rates.

Looking at the mid-term trend, India’s manufacturing sector looks poised for sustained growth, with the manufacturing PMI falling below 55 just once in the past two and a half years – in December 2023.