India's Manufacturing Sector at Its Strongest in 17.5 Years — July PMI Soars to 59.2

India’s manufacturing sector showed strong growth in July 2025, as the HSBC Flash India Manufacturing Purchasing Managers’ Index (PMI) climbed to 59.2. This is the highest level seen in nearly 17 and a half years, according to data released by S&P Global. The number rose from 58.4 in June, indicating that the country’s manufacturing activities continue to expand at a fast pace, supported by both local and global demand.

At the same time, the composite PMI—which includes both manufacturing and services—stood at 60.7 in July. This marks the fastest growth rate in over a year, driven by strong sales, increased export orders, and businesses investing in technology and larger capacities.

Manufacturing Leads Growth, Services Stay Strong

Among the two main sectors, manufacturing outpaced services in growth. Indian factories saw a quicker rise in output compared to service providers, reaching the fastest rate since April 2024. While the services sector also grew, the pace was slightly softer than in previous months, though still strong by historical standards.

Operating conditions across the private sector improved, with companies reporting solid growth in domestic sales, foreign orders, and overall production. Businesses also expressed confidence about future output, expecting demand and investment to remain strong over the next year.

Jobs and Prices Show Mixed Trends

Hiring increased, especially in services, showing that more jobs are being created along with business growth. However, job creation slowed slightly, marking the weakest hiring rate in 15 months. Inflationary pressures also rose, with both input costs and selling prices going up in July.

Business confidence dipped slightly, hitting its lowest point since March 2023, as companies voiced concerns over inflation and market competition.

Pranjul Bhandari, Chief India Economist at HSBC, said, “India’s economy continued to perform well in July. Manufacturing was ahead of services in terms of growth, but rising costs and slower job growth are areas to watch going forward.”