India’s manufacturing sector expanded at its fastest pace in more than 17 years in August 2025, as demand-driven growth in new orders and production boosted business activity, according to a private sector survey.
The HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose to 59.3 in August, compared to 59.1 in July, marking the strongest improvement in operating conditions since February 2008.
Demand & Production Drive Growth
S&P Global, which compiles the survey, reported that companies frontloaded production ahead of the recently implemented 50% US tariff on Indian exports, helping sustain momentum. Domestic demand remained particularly strong, cushioning against weaker international orders.
“India’s manufacturing PMI hit another new high in August, driven by a rapid expansion in production,” said Pranjul Bhandari, Chief India Economist at HSBC. She noted that uncertainty from US tariffs may have caused a slight moderation in new export orders, though domestic demand remained resilient.
Export Headwinds
The new US tariffs, effective August 27, included penalties tied to crude imports from Russia. While international orders still grew, the pace was the weakest in five months. Nonetheless, Indian firms secured fresh contracts from Asia, Europe, the Middle East, and the US, underscoring India’s diversified trade base.
Jobs & Optimism Remain Strong
Encouragingly, employment in the manufacturing sector rose for the 18th consecutive month in August, although at the slowest pace since November 2024. Job creation, however, remained solid by historical standards, highlighting continued business confidence.
Manufacturers also expressed optimism for future output, attributing growth not only to demand buoyancy but also to successful advertising and improved supply-demand alignment.
PMI Indicator
The PMI is based on responses from 400 manufacturing companies. A reading above 50 indicates expansion, while below 50 signals contraction.
Summary
India’s Manufacturing PMI surged to 59.3 in August 2025, the highest in 17 years, driven by robust domestic demand and frontloaded production ahead of new US tariffs. While export growth softened, overall orders and job creation remained strong, reflecting sustained momentum in the sector and manufacturers’ continued optimism.
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