Manufacturing Sector / India was waiting for this news for 16 months, now China and US will lose their arrogance

Manufacturing Sector: On August 1, 2025, such news came for India, which was awaited for the last 16 months. The country's manufacturing sector not only returned to track, but also reached a 16-month peak. The HSBC India Manufacturing PMI rose from 58.4 in June 2025 to 59.1 in July, indicating the strongest improvement in this sector since March 2024. This is a positive message for economic health, which can give new impetus to the country's economy.

What does PMI show?

The Manufacturing Purchasing Managers Index (PMI) is an important indicator of the health of a country's manufacturing sector. A score above 50 indicates expansion in production activities, while a figure below 50 indicates contraction. India's PMI reached 59.1 in July 2025, which was possible due to the boom in new orders and production. This is not only the highest level in 16 months, but it also shows that favorable demand conditions are taking Indian industries to new heights.

What are the reasons behind the surge?

According to Pranjul Bhandari, Chief India Economist, HSBC, the manufacturing sector grew at 59.1 in July, up from 58.4 in the previous month. The major reasons for this growth are:

Boom in new orders: According to the survey, total sales grew at the fastest pace in the last five years. This reflects strength in demand and consumer confidence.

Increase in production: Due to increasing demand for new orders, production reached a 15-month high in July.

Favourable demand conditions: Improvement in demand in domestic and international markets prompted manufacturers to increase production.

Although manufacturers are confident of production growth in the next 12 months regarding the business outlook, the level of positive sentiment is at its lowest in the last three years. This could be a result of uncertain global economic conditions or other external factors.

Rise in raw material prices

The survey also highlighted that cost pressures increased in July. Average costs rose faster than in June due to a rise in prices of raw materials such as aluminium, leather, rubber, and steel. However, favourable demand conditions enabled manufacturers to raise tariffs on their products, thereby easing some of the cost burden.

Survey reliability

The HSBC India Manufacturing PMI is compiled by S&P Global based on responses received from purchasing managers at a group of about 400 manufacturers. The survey presents a reliable and comprehensive picture of manufacturing sector activity.

What does it mean for India's economy?

This surge in the manufacturing sector is a good sign for India's economic growth. It will not only boost job creation and industrial production, but will also strengthen the possibility of growth in exports. However, rising raw material prices and global uncertainties may pose challenges in the future. The government and industries will need to work together to manage these risks to sustain this momentum.

This July 2025 figure marks a new beginning for India. It shows that with the right policies and favourable conditions, India's manufacturing sector can make its mark not only nationally but also globally.