India's manufacturing PMI rises to 55.1 in September, a seven-month high

India's factory sector grew at its fastest pace in seven months in September 2026. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 55.1 from 52.8 in August, according to the final data released on 1 October 2026.

A PMI reading above 50 means activity is expanding. A reading below 50 means it is contracting.

Flash vs final

The flash (early) estimate published in late September had put the index at 55.7. The final reading of 55.1 was lower, but it was still a 2.3-point improvement on August.

What drove the rise

• New orders grew at the fastest rate in seven months. Firms reported stronger demand for electronics, food, pharmaceutical and textile products.
• Export orders grew faster, with more demand from clients in Brazil, Europe, the UAE and the US.
• Output grew at the sharpest rate in four months.
• Hiring picked up at the fastest pace since May, and businesses were more confident about the year ahead.
• Inventories: Companies bought more inputs and built up stocks. Stocks of finished goods recorded one of their largest increases in nearly 12 years.

Prices

Input costs rose faster than in August because electronic components, pharmaceutical inputs and steel became more expensive. Factories also raised their selling prices more quickly. Both measures of price growth were still below their long-run averages.

Why it matters

• The data suggests factory demand is holding up despite high global energy prices.
• Faster price increases at the factory gate will be watched by the RBI, whose Monetary Policy Committee meets from 5 to 7 October 2026.
• Stronger hiring in manufacturing is good for jobs ahead of the festive season.

Other recent data

India's eight core industries grew 4.8% in August 2026, and retail inflation was 4.82% in August.