India factory growth hits 7-month high in September at 55.1

India's manufacturing sector expanded at its fastest pace in seven months in September, with the HSBC India Manufacturing PMI rising to 55.1 from a five-year low of 52.8 in August, according to data released on Thursday, 1 October 2026. The reading was lower than the preliminary flash estimate of 55.7 but marked the highest since February. A reading above 50 indicates expansion.

New orders rose at the fastest pace since February, driven by demand for electronic, food, pharmaceutical and textile products, The Hindu Business Line, Times Now and DD India report. Export orders also accelerated, with demand from Brazil, Europe, the UAE and the US. Employment expanded at its strongest rate since May, recovering from a decline in August. Business confidence rose to a four-month high.

Pranjul Bhandari, chief India economist at HSBC, said companies built up stocks in anticipation of sales, with finished-goods inventories recording their second-largest increase in nearly 12 years. Sahi reports the average composite PMI for the July-September quarter stood at 55.1, a decline from 58.2 in the April-June quarter, confirming a broader quarterly moderation. The RBI is expected to raise interest rates by a total of 50 basis points in 2026 to 5.75%, The Hindu Business Line reports.

Update, 1 October 2026: DD India reports the same headline PMI figure of 55.1 and confirms the seven-month high, the demand-driven recovery and the inventory build-up, quoting Pranjul Bhandari. It adds no new data beyond what Sahi, The Hindu Business Line and Times Now reported.