India manufacturing PMI rebounds in Jan to 55.4 as orders, output pick up

January manufacturing PMI: The rebound in January came after the seasonally adjusted PMI touched a two-year low of 55.0 in December 2025

India’s manufacturing sector continued to grow in January, with the HSBC Manufacturing Purchasing Managers’ Index (PMI) rising marginally to 55.4 in January from 55.0 in December 2025, according to the data compiled by S&P Global.

 

The rebound came after the seasonally adjusted PMI touched a two-year low in December 2025, signalling a stronger improvement in operating conditions. The reading, however, came in below the flash estimate of 56.8 released in late January, though it remained above the long-run average. 

The index also stayed well above the 50 mark, which separates growth from contraction.

 

HSBC Chief India Economist Pranjul Bhandari said, "Indian manufacturing firms saw a rebound in January, driven by increased new orders, output, and employment. Input costs rose moderately, while the pace of growth in factory-gate prices eased, resulting in slight margin pressure for manufacturers."

New orders pick up in Jan

After slowing in December, new orders picked up speed in January. Companies said stronger domestic demand and better marketing helped push sales higher in both the domestic and overseas markets.

Export orders remain weak

According to the report, most of the growth in sales came from within India. Even as export orders increased, it was one of the weakest rises in the past 15 months. Asia, Australia, Canada, Europe and the Middle East were some of the largest markets for companies that reported a strong growth in exports.

Input costs increase

Input costs rose at the fastest pace in four months, though the increase remained modest. Companies said they paid more for items such as chemicals, copper, iron, jute, paper, steel and transport.

 

At the same time, suppliers delivered raw materials faster than in December, helping firms build up their input stocks. Finished goods inventories, however, fell for the third month in a row.

Job creation fastest in 3 months

As pending work increased at the start of the year, manufacturers continued to hire more workers. Job creation remained limited but was the fastest seen in the last three months.

Forward outlook

Business confidence weakened further in January and fell to its lowest level in over three-and-a-half years. Only 15 per cent of companies expect output to grow in the coming year, while a large majority (83 per cent) expect no change.

 

"Despite faster growth in new orders, business confidence remains muted, and expectations for future output have declined to their lowest level since July 2022," said Bhandari.