Indian manufacturing activity showed signs of recovery in January 2026, with firms reporting faster growth in new orders, output, employment, and purchasing activity after losing momentum towards the end of 2025, according to the HSBC India Manufacturing PMI released on Monday.
The seasonally adjusted index rose to 55.4 in January from a two-year low of 55.0 in December, indicating an improvement in overall operating conditions across the sector. A reading above 50 signals expansion.
Survey respondents pointed to stronger demand conditions, higher new business inflows, and continued investment in technology as factors supporting the uptick in production. Output growth accelerated from December levels, while new orders also expanded at a quicker pace after slowing in the previous month.
The PMI data showed that sales to both domestic and international clients improved, driven by demand resilience and marketing efforts by manufacturers.
Input costs rose at the fastest pace in four months, the survey noted. However, growth in factory-gate prices moderated, leading to some pressure on profit margins.
Commenting on the data, Pranjul Bhandari, Chief India Economist at HSBC, said manufacturing firms witnessed a rebound in January, supported by stronger new orders, output, and hiring activity.
“Input costs rose moderately, while the pace of increase in factory-gate prices eased, resulting in mild margin pressure for manufacturers,” she said, adding that business confidence remains subdued. Expectations for future output slipped to their lowest level since July 2022, despite the near-term improvement in activity.
-ANI
