India’s manufacturing sector showed signs of slowing in September, expanding at its weakest pace in four months. Despite the slowdown, overall growth in the sector remains solid.
HSBC India Manufacturing PMI Data
According to HSBC’s India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, the PMI dropped to 57.7 in September from 59.3 in August. This was also below the earlier estimate of 58.5, marking the slowest improvement in factory operating conditions since May 2025.
Rising Factory Gate Prices
At the same time, factory gate prices increased at the fastest rate in nearly 12 years. This reflects rising input costs and higher expenses for manufacturers, which may affect product prices in the coming months.
Impact of US Tariffs
Economists suggest that part of the slowdown could be due to the United States’ 50% tariffs on Indian goods. These tariffs may start affecting India’s manufacturing exports, impacting Asia’s third-largest economy, which has been one of the fastest-growing major nations this year.
What the PMI Numbers Mean
Even though the PMI reading is above 50, indicating continued growth, the pace has clearly moderated. This slowdown may signal caution for investors and businesses in the Indian manufacturing sector.
Conclusion
India’s manufacturing growth is still positive, but September’s data shows the sector is facing challenges from rising costs and international trade policies. Monitoring future PMI trends and factory prices will be crucial for understanding the trajectory of India’s economy.
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