Indian manufacturing booms in April as exports see biggest leap in 14 years
New Delhi: India's manufacturing sector gained fresh momentum in April, driven by a sharp increase in output and robust international demand, according to the latest HSBC India Manufacturing Purchasing Managers' Index.
The seasonally adjusted PMI edged up marginally to 58.2 in April from 58.1 in March, marking the strongest improvement in the sector's health in ten months.
Pranjul Bhandari, Chief India Economist at HSBC, said, "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."
Bhandari added, "Manufacturing output growth strengthened to a ten-month high on robust orders. Input prices increased slightly faster, but the impact on margins could be more than offset by the much-faster rise in output prices, of which the index jumped to the highest level since October 2013."
The upbeat figures were underpinned by a surge in new orders, both domestic and international.
Export orders saw their second-fastest increase in 14 years--surpassed only once since March 2011--highlighting a significant boost in global demand for Indian-made goods.
Companies reported rising interest from key regions, including Africa, Asia, Europe, the Middle East, and the Americas.
Manufacturing output expanded at its quickest rate since June 2024, with widespread growth across subsectors.
Consumer goods manufacturers led the upturn. Rising demand also prompted a notable increase in employment, with 9 per cent of surveyed firms hiring additional staff, both on permanent and temporary contracts.
HSBC PMI mentioned, "A key factor contributing to the latest improvement in output growth was a sharp rise in new business. Little-changed from March, the rate of expansion was the second-strongest for nine months."
Despite higher input costs--driven by expenses in labour, transportation, steel, and other materials--manufacturers were able to pass these on to customers. Selling prices rose at the fastest pace since October 2013, even as input cost inflation remained moderate in comparison.
The influx of new orders also led to increased purchasing activity and stockpiling, with input inventories growing at the fastest pace since August 2024. However, post-production inventories declined at the sharpest rate in nearly three and a half years, indicating strong demand fulfilment.
Backlogs of work grew for the third consecutive month, with the rate of accumulation hitting a 15-month high. Meanwhile, supplier delivery times continued to improve, albeit slightly, reflecting reduced pressure on supply chains.
Looking ahead, manufacturers expressed strong optimism about the year ahead, buoyed by expectations of continued demand growth, enhanced marketing efforts, and new client acquisitions.
The PMI data signals a robust start to the 2025/26 fiscal year for Indian manufacturing, reinforcing its role as a key driver of economic momentum.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Observer
12 hours ago
- Observer
UK and India discuss cooperation amidst Lammy's visit
NEW DELHI: Britain and India on Saturday discussed expanding their "counter-terrorism" collaboration following recent fighting between India and Pakistan, Britain's foreign minister said after meeting Indian Prime Minister Narendra Modi. British foreign minister David Lammy is the highest-profile Western official to have visited both New Delhi and Islamabad since the South Asian neighbours agreed to a ceasefire last month after their worst fighting in nearly three decades. The latest tensions began in April after the killing of 26 men in Indian Kashmir that New Delhi blamed on "terrorists" backed by Pakistan, a charge Islamabad denied. India then attacked what it called "terrorist infrastructure" in Pakistan, leading to escalation from both sides until a May 10 ceasefire. "We want the situation to be maintained, but of course we recognise fragility, particularly in the backdrop of terrorism, terrorism designed to destabilise India," Lammy said in an interview at the residence of the British High Commissioner in New Delhi. "We are keen to continue to work with our Indian partners on counter-terrorism measures." He said he discussed the next steps with both Modi and Indian Foreign Minister S Jaishankar, but gave no specifics. Last year, India and Britain discussed combating the financing of terrorism, cooperation between law enforcement and judicial bodies; and information sharing. Lammy said he also discussed boosting trade between the world's fifth and sixth largest economies. The countries concluded talks for a free trade deal early last month. "I know that Prime Minister Keir Starmer is very much looking forward to coming to India very soon to sign the free trade agreement," Lammy said. "There is so much that our two nations can continue to do together." Meanwhile, Canadian Prime Minister Mark Carney invited his Indian counterpart Narendra Modi to the upcoming Group of Seven summit in a phone call, as the two sides look to mend ties after relations soured in the past two years. The leaders agreed to remain in contact and looked forward to meeting at the G7 summit later this month, a readout from Carney's office said. India is not a G7 member but can be invited as a guest to its annual gathering, which will be held this year in Kananaskis in the Canadian province of Alberta, from June 15 to 17. "Glad to receive a call from Prime Minister (Carney)... thanked him for the invitation to the G7 Summit," Modi said in a post on X. Modi also stated in his post on Friday that India and Canada would work together "with renewed vigour, guided by mutual respect and shared interests." Bilateral ties deteriorated after Canada accused India of involvement in a murder and of attempting to interfere in two recent elections. Canada expelled several top Indian diplomats and consular officials in October 2024 after linking them to the murder and alleged a broader effort to target Indian dissidents in Canada. New Delhi has denied the allegations and expelled the same number of Canadian diplomats in response. India is Canada's 10th largest trading partner and Canada is the biggest exporter of pulses, including lentils, to India. Carney, who is trying to diversify trade away from the United States, said it made sense for the G7 to invite India, since it had the fifth-largest economy in the world and was at the heart of a number of supply chains. "In addition, bilaterally, we have now agreed, importantly, to continued law enforcement dialogue, so there's been some progress on that, that recognises issues of accountability. I extended the invitation to Prime Minister Modi in that context," he told reporters in Ottawa. — Reuters
Times of Oman
2 days ago
- Times of Oman
Trade war with the US starts taking its toll on China
New Delhi: The trade war with the U.S. has started taking its toll on China. Exports to the lucrative American market have shrunk. At Chinese export hubs in south-eastern China, factories are lying closed and workers have been laid off. Stocks of finished products are accumulating in warehouses. China signed an agreement with the U.S. on May 12 for a temporary reduction in tariff but this did not have the desired effect. Factory activities in China continued to contract in May, with the Purchasing Managers Index at the end of May being 49.5. A PMI value less than 50 indicates contraction in business activities compared to the previous month. Because of a contraction in export, business houses in major export hubs in places like Zhejiang, Guangdong, and Jiangsu are announcing factory holidays; suspending production and reducing work hours and wages of employees. To clear the stockpile of goods at a discount, they are trying the social commerce platforms. Products ranging from yoga pants and footwear to home appliances and blankets which used to sell in the U.S. at fancy prices are now being sold online by Chinese exporting houses at bargain prices. A survey carried out by Radio Free Asia last April at a warehouse at Jiaxing in the Zhejiang province, where export items constitute the main business activity, has revealed heaps of merchandise originally meant to be exported now lying abandoned. Products selling at $100 in the U.S. do not sell in China even at a deeply discounted price of only a few dollars. Rubber clogs of U.S. footwear brand Crocs manufactured in China can sell in the American market for as high as $70 a pair but in the Chinese markets it is difficult to sell them even for a few pennies. The comparative advantage of China lies in its large manufacturing base and thoroughly integrated supply chains; particularly in hi-tech and green industries such as electrical vehicles and their batteries and solar energy. These sectors are heavily dependent on open markets and steady demands. Now the prohibitive tariff imposed by the Donald Trump government in the U.S. coming in the wake of earlier tariff restrictions imposed by the U.S., Europe and Canada on the import of Chinese electrical vehicles has caused demand to drop significantly for Chinese goods. Experts argue that China remains highly reliant on the U.S. as its top export market, to which it had exported goods worth nearly $450 billion in 2024. The crisis in the export market has hit even items that are produced only for the domestic market in China because of the overall economic downswing. The crippling tariff rate imposed by the U.S. has stood in the way of the recovery of the already sagging consumer sentiments in China since the pandemic. Like, the Chinese knife brand Zhang Xiaoquan is sold mostly in the domestic market; with exports accounting for less than one percent of the annual sales. But even that knife is selling at a few cents per knife. One factory is pushing its employees to sell overstocked blankets online. A factory manager had lately managed to sell 60 blankets to his own relatives and friends. Workers in the factory at Suzhou city in Jiangsu were told that their working hours would be reduced and they would be paid only their basic wages. An angry Beijing has threatened countermeasures against countries which are signing trade deals with the U.S. at the expense of China to get tariff exemptions from Washington. This threat has followed recent reports that President Donald Trump is seeking to use the tariff talks to push partners of the U.S. in trade to curb imports from China. In return, these countries could secure reductions in additional tariffs imposed by the U.S. The Trump administration has said it is in negotiations with more than 50 countries; among them Israel, Japan, the U.K., Vietnam, Cambodia, Thailand, South Korea, India, Australia, Argentina, Canada, Mexico, Switzerland, Malaysia, Indonesia and the European Union countries. Beijing has threatened to target all these countries in turn. Following the May 12 agreement with China, Washington had lowered its 145 percent tariff on Chinese goods to 30 percent for 90 days to allow for more negotiations. Donald Trump had all along been accusing China of exploiting the U.S. in external trade, and arguing that his tariffs were necessary to revive domestic manufacturing in the U.S. and return jobs to American workers. China, too, had reduced its taxes on imports from the U.S. to 10 percent from the earlier 125 percent. But this agreement is now in the process of coming unstuck. On May 30, the U.S. President accused China of violating a bilateral deal to roll back tariffs and announced a general increase in the tariff on the import of steel and aluminium to 50 percent. Although China does not export much steel to the United States since the imposition of a 25 percent tariff in 2018 to shut out Chinese steel, it ranks third among aluminium suppliers to the U.S. Washington has indicated that Beijing has been slow on its promise to issue export licences for rare earth minerals. Last December, China announced a ban on exports to the U.S. of critical minerals, including gallium, germanium and antimony. Beijing announced more export controls on rare earth minerals last April after Donald Trump had announced the U.S. tariffs. The May 12 agreement in Geneva called for China to lift measures to restrict its export of critical metals needed for U.S. semiconductor, electronics and defence production. US Treasury Secretary Scott Bessent has said in a recent interview that talks with China had stalled. US Trade Representative Jamieson Greer has said China has not removed non-tariff barriers as agreed. 'We haven't seen the flow of some of those critical minerals as they were supposed to be doing.' The trade war with the U.S. has thus started taking its toll on China and there is little possibility that pressure on the Chinese economy will end soon.
Muscat Daily
5 days ago
- Muscat Daily
Good news expected soon on India-Oman FTA: Minister
Muscat – India and Oman are close to finalising a Free Trade Agreement (FTA), with some 'good news' expected very soon regarding the signing of the deal, according to India's Minister of Commerce and Industry, Piyush Goyal. As reported by several Indian media outlets on Monday, Goyal stated that negotiations between India and Oman on the proposed free trade agreement are progressing towards a conclusion. The talks gained renewed momentum following Goyal's visit to Muscat in January this year. The negotiations for the agreement, officially known as the Comprehensive Economic Partnership Agreement (CEPA), formally commenced in November 2023. 'I think you will see some good news very soon on the Oman FTA,' Goyal told reporters during his official visit to France, when asked whether the agreement could be concluded this year, according to PTI. Goyal was in France to hold discussions with French leaders and businesses aimed at enhancing trade and investment ties. He was also scheduled to attend a mini-ministerial meeting of the World Trade Organization (WTO) on Tuesday. Oman is India's third-largest export destination among the GCC countries. India already has a similar agreement in place with another GCC member, the United Arab Emirates, which came into effect in May 2022. India's key imports from Oman include petroleum products and urea, which together account for over 70% of total imports. Other significant imports from Oman comprise polymers of propylene and ethylene, petcoke, gypsum, chemicals, and iron and steel. Speaking about such FTAs, Goyal remarked that these agreements not only promote trade in goods and services, but also strengthen supply chains and instill confidence among businesses on both sides through stable policies and predictability, according to the PTI report. 'So, in a way, it's a big message when you conclude an FTA,' he added.
