The manufacturing sector exhibited robust growth in February, achieving its most rapid expansion in five months, as per reports from news agency Reuters.
This upsurge in growth can be attributed to a combination of heightened global demand and a decline in inflationary pressures.
The HSBC final India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 56.9 in February, up from January's 56.5, surpassing the preliminary estimate of 56.7.
Maintaining its streak above the 50-mark for 32 consecutive months, the country's manufacturing PMI signals growth rather than contraction.
India, positioned as Asia's third-largest economy and the globe's fastest-growing major economy, recorded an expansion of 8.4 percent in the October-December quarter.
This growth surge, partly fueled by a manufacturing boom, as revealed by government data released on Thursday, surpassed expectations, outpacing the 6.6 percent expansion forecast in a Reuters survey.
Constituting 17 percent of India's economy, the manufacturing sector experienced a notable 11.6 percent year-on-year growth in the last quarter.
Ines Lam, an economist at HSBC, emphasized that the HSBC final India Manufacturing PMI underscores sustained robust production growth, buoyed by both domestic and international demand.
Furthermore, the report highlighted an uptick in manufacturing firms' margins, attributable to a reduction in input price inflation, which hit its lowest level since July 2020.
Driven by strong demand, the output and new orders sub-indexes reached five-month highs, propelled by advancements in technology and increased sales, leading to a surge in production.
According to a Reuters poll, the Reserve Bank of India is anticipated to maintain interest rates until at least July, aligning with the ongoing strong growth momentum and inflation remaining within the target range of 2-6 percent.
