India's Manufacturing Momentum Slows: Insights from September PMI Survey

India's manufacturing sector showed signs of easing in September, with a slowdown in new orders, output, and input buying. Job creation hit a one-year low, although business optimism is bolstered by tax relief. International demand saw an uptick despite US tariffs, driving confidence in future production.

In September, India's manufacturing sector experienced a deceleration in activity, as indicated by a dip in the HSBC India Manufacturing Purchasing Managers’ Index (PMI) from 59.3 in August to 57.7. This marks the sector's slowest growth since May, despite a boost in business confidence due to tax relief measures.

The survey, conducted between September 10 and 24, revealed a slowdown in new orders, output, and input buying, coupled with the weakest job creation in a year. Despite these challenges, growth in international orders and positive demand trends are driving future production optimism among manufacturers.

Inflation pressures surged with significant increases in input costs and selling prices, reaching a near 12-year high. Nevertheless, changes in GST rates and improved demand from regions outside the US bolster confidence, positioning Indian manufacturers for a promising future outlook.