India’s manufacturing sector regained momentum in September 2026, with activity reaching a seven-month high amid stronger domestic and export demand. The improvement was supported by rising new orders, higher output, renewed hiring and improved business confidence.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) increased to 55.1 in September from 52.8 in August, according to the monthly survey.
A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction. The September figure therefore indicated a stronger improvement in manufacturing activity compared with the previous month.
According to HSBC Chief India Economist Pranjul Bhandari, stronger domestic and overseas demand lifted sales and production, while factory hiring resumed at its fastest pace since May.
Manufacturers recorded stronger sales across sectors including electronics, food, pharmaceuticals and textiles.
Total sales growth reached its highest level since February, while export orders also increased. Survey respondents reported stronger demand from markets including Brazil, Europe, the UAE and the United States.
Employment growth resumed in September after slowing in the previous month.
The survey indicated that the pace of factory job creation was solid and represented the strongest increase since May, reflecting the improvement in production and order volumes.
Companies increased purchases of materials to support production and prepare for expected future demand.
Finished goods inventories rose for the third consecutive month, with the increase described in the survey as the second-fastest in nearly 11.5 years, behind July.
The development suggests manufacturers were preparing for continued sales and production requirements.
Manufacturers also became more optimistic about the months ahead. Overall business sentiment reached a four-month high, supported by a healthy pipeline of new enquiries and expectations of sustained demand.
At the same time, input costs and selling prices increased at a faster pace, although inflation rates remained mild by historical standards, according to the survey.
