India’s manufacturing PMI showed continued resilience in April 2026, with the HSBC Manufacturing Purchasing Managers’ Index (PMI) rising to 54.7 from 53.9 in March, indicating sustained expansion in industrial activity. However, the pace of growth remained one of the slowest in nearly four years, reflecting moderation in new orders and output despite staying firmly above the 50-mark threshold that signals expansion.

Key Highlights

• India's manufacturing PMI rises to 54.7 in April, expansion continues despite slowest growth pace in four years.
• Rising input costs and Middle East tensions push inflation higher, while export demand and hiring remain strong.

The survey highlighted that new orders, production, and employment continued to grow, albeit at a subdued pace compared to recent years. Export demand emerged as a bright spot, recording strong growth supported by demand from global markets including Europe, Asia, and the Middle East. Meanwhile, hiring activity picked up, with job creation reaching a 10-month high, indicating optimism among manufacturers about future demand.

Cost Pressures and Inflation Concerns Rise

Despite steady expansion, inflationary pressures intensified sharply, with input costs rising at the fastest pace since August 2022, largely due to higher prices of raw materials, fuel, and supply disruptions linked to geopolitical tensions in the Middle East. Manufacturers responded by increasing output prices at the fastest rate in six months, highlighting pressure on margins.

Competitive market conditions and delays in client approvals also weighed on growth momentum. Companies cited cautious customer behavior and pricing sensitivity as key factors limiting faster expansion, even as demand remained broadly stable.

Pranjul Bhandari, Chief India Economist at HSBC stated, “Spillovers from the Middle East conflict are becoming more evident, particularly through inflation: input costs increased at the fastest pace since August 2022, and output prices rose at the quickest rate in six months.” 

Also Read: India's March PMI: Service at 14-Month Low & Composite at 57

Outlook: Resilient Yet Cautious

Looking ahead, Indian manufacturers remain optimistic about future growth, supported by marketing efforts, improving export demand, and expectations of project approvals. However, business confidence has slightly softened, reflecting concerns over rising inflation, geopolitical risks, and cost pressures.

Overall, while India’s manufacturing PMI continues to expand steadily, the PMI data signals a phase of moderated growth, where resilience is being tested by external headwinds and rising input costs.