The country'sI manufacturing sector expanded at its slowest pace in over a year in February as demand weakened both domestically and internationally, according to a private survey released on Monday.
The HSBC India Manufacturing Purchasing Managers&rsquo; Index (PMI), compiled by S&amp;P Global, dropped to 56.3 in February from 57.7 in January, marking its lowest level since December 2023. Despite the slowdown, the sector maintained growth for the 44th consecutive month, remaining above the 50-mark that separates expansion from contraction.
The survey showed that new orders and production growth softened, reaching their lowest levels in 14 months. Export demand also declined slightly after hitting a 14-year peak in January.
&ldquo;Although production growth eased, the overall sentiment in India&rsquo;s manufacturing sector remained positive,&rdquo;&nbsp;said Pranjul Bhandari, chief India economist at HSBC. She noted that global demand, along with investments in technology, supported employment and purchasing activity.
Manufacturers continued hiring for the 12th consecutive month, though at a slower pace compared to January, when job additions had been the highest in two decades.
Input cost pressures moderated, with prices rising at their slowest rate in a year. Selling prices increased at a five-month low, suggesting companies absorbed some costs instead of passing them on to customers.
The report comes as India&rsquo;s broader economy shows signs of resilience. Official data indicated that GDP grew by 6.2% in the October-December quarter, up from 5.6% in the previous quarter. However, manufacturing growth remained subdued, with goods production increasing by just 3.5%.
Retail inflation declined to a five-month low in January, fueling expectations that the Reserve Bank of India (RBI) may consider further interest rate cuts to support economic expansion.
Despite the moderation in factory output, business confidence stayed strong, supported by steady demand, a growing customer base, and ongoing investment in new projects.

The report comes as India’s broader economy shows signs of resilience.

Feb manufacturing activity eases as demand cools; employment stays strong, costs moderate

Factory Growth Slows to 14-Month Low in India

Feb manufacturing activity eases as demand cools; employment stays strong, costs moderate

March 3, 2025 | 16:42 IST