According to the HSBC India Manufacturing Purchasing Managers’ Index (PMI), the index slipped to 55.0 in December from 56.6 in November. This reading marked the lowest level since December 2023, when the PMI stood at 54.9. The Manufacturing PMI two-year low reflects easing business conditions rather than contraction.

New business orders grew at a slower pace during the month. Export demand also showed weakness, as new export orders rose at the slowest rate in 14 months. Manufacturers linked this trend to softer global demand and cautious overseas buyers.

Production levels continued to expand, but factories reported slower output growth. At the same time, employment growth softened, with firms adding fewer workers. Many companies preferred to manage workloads with existing staff amid uncertain demand.

Despite the slowdown, business confidence stayed relatively stable. Manufacturers expect demand to improve in the coming months, supported by domestic consumption and easing input pressures.

Economists say the PMI data points to moderation, not distress. They believe India’s manufacturing sector still shows resilience, although growth has cooled after strong performance earlier in 2025.

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