India's Manufacturing PMI Jumps To 58.1 In March, Driven By Strong New Orders

(MENAFN- KNN India) New Delhi, Apr 2 (KNN) India's Manufacturing Purchasing Managers' Index (PMI) rose to 58.1 in March 2025, up from 56.3 in February, according to data released by HSBC and compiled by S&P Global on Wednesday.

The increase was driven by stronger growth in new orders, as the New Orders Index reached its highest level in eight months.

This improvement was attributed to rising customer interest, favourable demand conditions, and effective marketing efforts.

Pranjul Bhandari, Chief India Economist, HSBC, noted that while international orders saw a slight slowdown, overall demand momentum remained strong.

The new orders index reached an eight-month high of 61.5, prompting firms to utilise their inventories at the fastest pace in over three years.

Business sentiment remained positive, with approximately 30 per cent of survey respondents expecting higher output volumes in the coming year, compared to less than 2 per cent anticipating a contraction.

In response to robust demand, manufacturers ramped up production at a pace exceeding historical averages. To manage the increased demand, firms relied on existing inventories, leading to the steepest drop in finished goods stocks since January 2022.

Additionally, companies increased input purchases at the fastest rate in seven months to mitigate stock depletion.

Despite a slight slowdown in international sales growth, demand from key markets in Asia, Europe, and the Middle East remained strong.

The manufacturing PMI had previously declined to a 14-month low of 56.3 in February due to weaker growth in output, sales, and input purchases.

The Manufacturing PMI is an economic indicator that measures activity in the manufacturing sector. Based on a survey of purchasing managers across industries, it provides insights into business conditions, including production levels, new orders, employment, supplier delivery times, and inventory trends.

As an early gauge of economic health, the PMI is closely monitored by businesses, policymakers, and investors to assess trends in the manufacturing industry and the broader economy.

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) is set to hold its first meeting of the 2025-26 fiscal year from April 7 to 9.

According to a Business Standard poll, the MPC is expected to lower the benchmark interest rate by 25 basis points in its policy review to support economic growth.

The RBI had previously tightened monetary policy in response to persistent inflation, raising the policy rate by 250 basis points between May 2022 and February 2023 to reach 6.5 per cent. In February 2025, the central bank cut the repo rate by 25 basis points to 6.25 per cent.

(KNN Bureau)

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