Manufacturing activity rebounds in October; festive demand, GST cuts lift sentiment

Manufacturing data for October

India’s factory activity picked up pace in October, with the HSBC Manufacturing Purchasing Managers’ Index (PMI) rising to 59.2, up from 57.7 in September, data released on November 3 shows.

The improvement reflects a boost from festive-season demand and the government’s GST rate rationalisation.

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Strong start to Q3

The October uptick suggests that the industrial sector began the third quarter of FY26 on a solid footing, even as the central bank expect overall growth to moderate from the highs of the first half.

India’s economy grew 7.8 percent in the first quarter, its fastest pace in five quarters, and is expected to expand by 7 percent in the second quarter, according to Reserve Bank of India (RBI) estimates. Growth, however, is projected to ease to 6.2 percent by the final quarter.

The central bank expects the economy to post below 6.5 percent growth in the second half of the fiscal.

Upward revisions by global institutions

Despite the expected slowdown, India’s outlook remains brighter than projected. Major international agencies have revised their forecasts upward in recent weeks. The International Monetary Fund now expects 6.6 percent growth in FY26, up from 6.4 percent projected in July, while the World Bank has upgraded its forecast to 6.5 percent from 6.3 percent earlier.