India’s manufacturing activity continued to expand in October, although the pace of growth slowed slightly. 

The HSBC India Manufacturing Purchasing Managers’ Index (PMI) declined to 54.7 from 55.1 in September, according to data released on 2 November. Despite the decline, the index remained comfortably above the 50 mark, which separates growth from contraction. Strong overseas demand helped support factory activity, with new export orders recording their fastest growth in six months.

Indian manufacturers received more orders from international markets, including the United States, United Kingdom, Canada, Bangladesh, Indonesia, Saudi Arabia and the UAE.

Companies attributed the improvement to new customer acquisitions, favourable demand conditions and successful marketing efforts. Higher sales and new product launches also supported factory production, although output growth slowed compared with September.

Another positive development was the decline in manufacturing cost pressures. Input cost inflation fell to its lowest level since February 2026, despite increases in the prices of certain raw materials and energy.

Manufacturers also increased selling prices at their slowest pace in nearly four years. This could provide some relief to customers and businesses facing higher production costs.

Manufacturing companies continued hiring for the second consecutive month as production requirements increased. However, job creation slowed, while some capital goods manufacturers reduced their workforce.

Business confidence also weakened compared with September. Only around 18% of surveyed manufacturers expected production to increase over the next 12 months.

India’s manufacturing sector remains in expansion mode, supported by strong export demand and easing cost pressures. However, slower domestic demand, weaker hiring and declining business confidence will remain important factors to watch in the coming months.

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