India Manufacturing PMI: January 2026 Sees Growth & Rise to 55.4 | HSBC Data
India’s economic expansion continued into January, with both the manufacturing and composite sectors demonstrating growth. The HSBC Manufacturing Purchasing Managers’ Index (PMI) rose to 55.4 in January, up from 55.0 in December 2025, as compiled by S&P Global. Simultaneously, the HSBC Flash India Composite Output Index, encompassing both manufacturing and services, increased to 59.5, a rise from December 2025’s 57.8.
Manufacturing Sector Rebound
The January PMI reading in the manufacturing sector represents a rebound following a two-year low of 55.0 in December 2025. While the January figure fell short of the initial flash estimate of 56.8, it remained comfortably above the long-run average. A PMI reading above 50 signifies expansion, indicating positive momentum in the sector.
Growth Across Sectors
The composite index, tracking combined output from manufacturing and services, showed similar growth rates in both sectors. This suggests broad-based economic activity contributing to the overall expansion. The seasonally adjusted index tracks month-on-month changes.
According to Pranjul Bhandari, chief India economist at HSBC, the rebound in manufacturing was driven by increased new orders, output, and employment. However, Bhandari also noted moderate increases in input costs and easing growth in factory-gate prices, leading to slight margin pressure for manufacturers. Despite the growth in new orders, business confidence remains muted, with expectations for future output at their lowest level since July 2022.
Frequently Asked Questions
What is the significance of a PMI above 50?
A reading above 50 indicates economic expansion in the manufacturing or construction sectors, while a reading below 50 suggests contraction.
What drove the rebound in India’s manufacturing sector in January?
The rebound was driven by increased new orders, output, and employment, according to Pranjul Bhandari, chief India economist at HSBC.
What concerns were raised despite the growth in January?
Despite faster growth in new orders, business confidence remains muted, and expectations for future output have declined to their lowest level since July 2022. Manufacturers are also facing slight margin pressure due to rising input costs.
Looking ahead, continued growth is not guaranteed. The muted business confidence and declining output expectations could potentially temper the pace of expansion. Further monitoring of input costs and factory-gate prices will be crucial, as will observing whether new order growth can be sustained. It remains to be seen if these trends will continue in the coming months.