India’s manufacturing activity rose to a 10-month high of 58.2 in April compared with 58.1 in the previous month, according to results of a private sector survey released on May 2.
The HSBC India Manufacturing Purchasing Managers' Index logged a reading of over 58 for the second consecutive month in April following a ramp up of activity in March as Indian manufacturers rushed to get their product to American shores to escape tariffs.
"The notable increase in new export orders in April may indicate a potential shift in production
to India, as businesses adapt to the evolving trade landscape and US tariff announcements.
Manufacturing output growth strengthened to a ten-month high on robust orders," said Pranjul Bhandari, chief India economist, HSBC.
Export orders rose at the second-fastest pace in 14 years.
The rise in business also reflected in employment numbers, as staffing levels increased during the month. Nearly a tenth of firms took on extra workers during the month.
On the inflation front, while input costs rose at the fastest pace in four months, output inflation increased to an 11 and a half year high, as companies continued to transfer costs.
Business optimism also rose in April. "Strong optimism regarding output prospects over the coming year was evident in the April data, driven by expectations of demand strength," said HSBC.
India’s economy had a better start to the fiscal, as GST collections rose to an all-time high of Rs 2.37 lakh crore compared with Rs 1.96 lakh crore in March and Rs 2.1 lakh crore in April 2024.
The annualised growth in GST collections at 12.6 percent was at a 17-month high in April.
Daily digital transactions rose to highest level of 596.3 million in April compared with 590 million in March. Daily transactions rose 35 percent in April.
FASTag payments were also 17 percent higher in April.
India’s economy is expected to perform better than the rest of the world, with growth expected to be over 6 percent in FY26.
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