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Informist, Friday, May. 2, 2025

 

--India Apr manufacturing PMI 58.2 vs 58.1 in Mar

 

NEW DELHI – Activity in India's manufacturing sector expanded at a faster rate in April than in March, with the HSBC India Manufacturing Purchasing Managers' Index edging up to 58.2 from 58.1 the previous month, S&P Global said on Friday. At 58.2, the manufacturing index is the highest in 10 months.

 

The final manufacturing PMI print for April is a tad lower than the flash figure of 58.4, data for which was released on Apr. 23. A PMI reading of more than 50 denotes expansion in activity, while a print below it shows contraction.

 

"Growth momentum in the Indian manufacturing industry improved in April, with output increasing at the fastest pace since June 2024 on the back of another strong expansion in order books. Total sales were supported by the second-fastest upturn in international orders since March 2011. This positive trend was accompanied by notable rises in employment and purchasing activity," S&P Global said.

 

According to Pranjul Bhandari, chief India economist at HSBC, the sizable rise in new overseas orders in April "may indicate a potential shift in production to India, as businesses adapt to the evolving trade landscape and US tariff announcements".

 

While paused for 90 days, the Trump administration's so-called reciprocal tariffs have sent American companies scurrying to look for alternative sites to China for the manufacture of their goods. Financial Times reported last week that Apple was looking to move the assembly of all US-sold iPhones to India, with the objective to diversify its supply chain away from China amid trade tensions between the world's two largest economies.

 

Tellingly, the increase in orders in April occurred despite prices charged to customers rising the most on a year-on-year basis in over 11 years. Input prices, meanwhile, rose at the fastest pace in four months.

 

Outstanding business, on the other hand, increased at the fastest clip in 15 months even as manufacturers hired more workers to meet the fatter order books. Producers looked to get ready for the future, with input stocks rising most since August last year.

 

While the strength of India's manufacturing activity will encourage policymakers, the sharp price hikes faced by customers in April will raise some eyebrows on Mint Street. The Reserve Bank of India's Monetary Policy Committee, which has cut the policy repo rate by 50 basis points to 6.00% so far in 2025, is widely expected to reduce interest rates by anther half a percentage point in the next three months as headline retail inflation is seen around the medium-term target of 4% for the rest of the year.

 

CPI data for April will be released on May 13. In March, CPI inflation had fallen to a 67-month low of 3.34%.  End

 

Reported by Siddharth Upasani

Edited by Avishek Dutta

 

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