India’s Manufacturing Activity Accelerates in October, PMI Rises to 59.2

New Delhi, November 3, 2025 – The manufacturing sector of the economy reported a sharp expansion in the previous month (October 25), as per the HSBC India Manufacturing Purchasing Managers’ Index (PMI), which rose to 59.2. It was reported 57.7 in September 2025, and hence, the growth is considered one of the strongest in the past few months.

Further, according to data compiled by S&P Global, the higher manufacturing activity could be attributed to several factors, including faster improvement in factory production. The data also mentions stronger domestic demand and higher purchasing activity recorded during the month. The strong momentum continued in the post-manufacturing cycle that coincides with the festival season in most parts of the country.

Surge Driven by Domestic Orders

As the manufacturing sector was expected to struggle due to ongoing trade negotiations and additional tariffs imposed by the US President on Indian companies, the improvement was largely driven by robust local demand. Export orders saw the smallest increase over the past 10 months, and the manufacturing expansion only underscores the country’s reliance on internal consumption for industrial growth.

Due to higher domestic consumption, manufacturers had to increase raw material purchases, and inventory levels rose accordingly. The buying levels were the highest since May 2023.

Capacity and Supply Dynamics

As demand increased, some fundamental issues, such as capacity pressures, remained moderate. The outstanding business volumes increased only marginally, and production enterprises cited high domestic demand as the reason for mild backlogs. The suppliers’ performance was quite efficient, and they achieved the fastest turnaround time in the past four months.

As noted earlier, manufacturers bought more raw materials than before, and hence inventories (raw materials, WIP, and finished goods) rose at the highest pace since March 2005. The finished goods inventory also increased, as manufacturing concerns have a larger backlog.

Outlook: Optimism on Growth and Reforms

Even when the trade negotiations (Indo-US) have not concluded, manufacturers are optimistic about the future. The main reasons include robust demand in different parts of the country, GST benefits, and market benefits. The S&P Report also suggested that companies anticipate higher demand in the next two quarters and are focused on clearing pending contracts. If the October PMI readings are anything to go by, the manufacturing sector’s role in economic strength will be higher in the future, supported by domestic consumption, policy improvements, and better technology adoption.

Disclaimer: At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations