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India's Manufacturing PMI Eases to 55 in Dec, But Industry Finishes 2025 Strong

India's manufacturing sector continued to expand in December, with the HSBC PMI reading of 55 indicating solid growth, albeit at a slower pace than November. The industry concluded 2025 positively, supported by strong new business intakes and historically low input cost inflation. While the expansion in new orders and production was the slowest in over a year, competitive pricing due to low cost pressures offers hope for attracting new business. Manufacturers remain optimistic for 2026, citing positive demand trends from key international markets.

Key Points: India's Manufacturing PMI at 55 in Dec, Wraps Up 2025 Strong

  • PMI eases but stays above average
  • New orders rise sharply but slowest in a year
  • Input cost inflation at historically low pace
  • Export order growth softens but outlook positive
2 min read

India's manufacturing PMI eases to 55 in Dec, industry wraps up 2025 in 'good shape'

India's manufacturing PMI eased to 55 in December but remained in expansion, with positive demand and low inflation supporting a healthy outlook for 2026.

"Even with growth momentum easing, India's manufacturing industry wrapped up 2025 in good shape. - Pollyanna De Lima, S&P Global"

Mumbai, Jan 2

India's manufacturing activity continued to expand in December, albeit at a slower pace, as HSBC India Manufacturing Purchasing Managers' Index eased to 55 in December from 56.6 in November, a report showed on Friday.

The report compiled by S&P Global said that despite the moderation in growth, HSBC India Manufacturing PMI, held above its long-run average and the industry "wrapped up 2025 in good shape".

It said that positive demand continued to underpin sharp increases in new business intakes and production, but expansion rate eased due to competitive pressures and subdued sales of specific items.

"Even with growth momentum easing, India's manufacturing industry wrapped up 2025 in good shape. The sharp rise in new business intakes should keep companies busy as we head into the final fiscal quarter, and the lack of major inflationary pressures could continue to support demand," said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.

The upturn in buying levels was the least pronounced in two years and like the past two months, input costs rose at a historically negligible pace, the report said. The rate of charge inflation eased to a nine-month low, the research agency noted.

Intakes of new work rose at a sharp rate, albeit one that was the weakest since December 2023. Similarly, output levels expanded at the slowest pace since October 2022.

Pollyanna noted a steady spell of softer growth in new export orders, with number of companies signalling higher international sales in December halved to the average for 2025.

"With Indian manufacturers facing less intense cost pressures than elsewhere, many will be hoping that competitive pricing can help bring in new business from other regions in the new year," Pollyanna added.

The report cited better demand from clients in Asia, Europe and the Middle East and Indian manufacturers foresee an increase in output during 2026.

The firm cited advertising, positive demand trends and new product releases as tailwinds to the outlook, but some firms were concerned about competitive pressures and market uncertainty.

- IANS

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Reader Comments

S
Sarah B
As someone working in the auto components sector, I can feel this 'moderation'. Orders are still coming, but the competition, especially from Southeast Asia, is getting fierce. Hope the government's PLI schemes keep giving us an edge.
V
Vikram M
The export order slowdown is a bit worrying. "Halved to the average for 2025" – that line jumped out. We need to diversify our export markets more aggressively beyond the usual ones. Make in India for the world needs a second wind!
P
Priya S
Positive news overall! Wrapping up the year in 'good shape' with controlled inflation is an achievement. Hope this stability translates into more jobs on the ground. The focus should now be on skilling workers for advanced manufacturing.
R
Rohit P
Respectfully, while the headline number is good, we shouldn't ignore the "weakest since Dec 2023" for new work and "slowest since Oct 2022" for output. It's a clear cooling signal. The optimism for 2026 needs to be backed by concrete policy support, not just hope.
K
Kavya N
Demand from Asia, Europe & Middle East is holding up, that's the key. And with lower cost pressures here compared to other regions, our manufacturers have a genuine pricing advantage. Time to go out and grab more market share! 💪

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