Manufacturing growth cools to 24-month low of 55 in December as export momentum weakens

PMI Manufacturing for December

• India's manufacturing PMI fell to 55 in December, a 24-month low.
• Export growth hit a 14-month low as fewer firms report higher overseas orders.
• Domestic demand and low costs to boost manufacturing activity.

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India’s manufacturing sector ended 2025 on a softer note, with growth cooling to a 24-month low in December, even though activity remained firmly in expansion territory.

The manufacturing Purchasing Managers’ Index (PMI) eased to 55 in December, down from 56.6 in November, reflecting slower momentum in new orders and a marked softening in export demand.

Exports lose steam

Export growth slipped to a 14-month low, with survey responses indicating that fewer firms reported an increase in overseas orders.

In December, the share of firms reporting higher international sales was about half the 2025 average, underlining the sharp deceleration.

Domestic support, muted cost pressures

Despite the slowdown, economists remain cautiously optimistic about near-term prospects. Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said manufacturers are entering the final stretch of the fiscal year on reasonably firm footing.

“Even with growth momentum easing, India’s manufacturing industry wrapped up 2025 in good shape,” she said, adding that a solid pipeline of domestic business should help sustain factory activity. Subdued input-cost pressures are also expected to support demand and allow firms to maintain competitive pricing.

Gradual cooling

Still, the broader trend shows a steady loss of momentum through the year. After peaking around mid-2025, PMI readings have drifted lower, with December marking the slowest pace of expansion in two years.