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June manufacturing PMI at 14-month high of 58.4 driven by export orders

2025-07-01 00:00:00.0 商业标准报-经济和政策原网页

India’s manufacturing activity rose to 58.4 in June 2025, up from 57.6 in May, marking a 14-month high, the HSBC India Manufacturing Purchasing Managers’ Index (PMI) showed, according to data compiled by S&P Global on Tuesday.

Export orders drive manufacturing growth in June

New export orders saw their third-highest growth rate since the survey’s inception in 2005, with more orders from the US in June, the report said. Export order growth was seen across all product categories, including consumer, intermediate, and capital goods.

Meanwhile, output volumes also rose at the quickest pace since April 2024, but growth was not evenly distributed across sectors. Intermediate goods producers led growth in terms of volume, while the consumer and capital goods sectors saw moderate growth. The upswing in new orders was driven by marketing initiatives and increased export sales, the survey showed.

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Manufacturers benefited from the lowest input cost inflation since February, despite rising prices for iron and steel.

Commenting on the growth, Chief India Economist at HSBC Pranjul Bhandari said, "Robust end-demand fuelled expansions in output, new orders, and job creation. To keep up with strong demand — particularly from international markets, as evidenced by the substantial rise in new export orders — Indian manufacturing firms had to tap deeper into their inventories, causing the stock of finished goods to continue shrinking. Finally, input prices moderated while average selling prices rose as some manufacturers passed on additional cost burdens to clients."

Employment jumps amid short-term hiring

Employment levels also surged in June. The survey noted that the month marked the highest pace of hiring in its history. This rise, however, was largely attributed to short-term hiring to meet rising workloads, as backlogs returned to growth after stagnating in May.

Industrial production falls to nine-month low in April

Meanwhile, India’s industrial output grew by just 1.2 per cent in May, marking the slowest pace in nine months, government data showed on Monday. Electricity generation fell sharply by 5.8 per cent, dragged down by an early monsoon. This was the first contraction in nine months and the steepest since June 2020. Mining output also declined by 0.1 per cent, recording its second straight monthly fall. RBI cuts rate by 100 bps

Between February and June, the Reserve Bank of India (RBI) has cut the policy repo rate by 100 basis points, bringing it down to 5.5 per cent, as inflation softened within the central bank’s comfort zone. The rate cut came as a relief for borrowers, with expectations of lower EMIs on long-term loans, particularly benefiting homebuyers.

The RBI has revised its retail inflation forecast for the current financial year to 3.7 per cent, down from its earlier projection of 4 per cent in April.

Meanwhile, the central bank has retained its Gross Domestic Product (GDP) growth forecast at 6.5 per cent for 2025-26. The quarterly growth projections stand at 2.9 per cent for April–June, 3.4 per cent for July–September, 3.9 per cent for October–December, and 4.4 per cent for January–March.

ALSO READ: RBI policy: MPC cuts repo rate by 50 bps to 5.5%, shifts stance to neutral

What is PMI?

The PMI is an economic indicator of business activity within a sector. It tracks production levels, new orders, employment, supplier performance, and inventory, based on responses from purchasing managers. A reading over 50 shows expansion in the sector, while a reading below this mark indicates a contraction in the sector. A reading of 50 suggests no change in activity.

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The US considers India a "strategic ally" in the Indo-Pacific region and a trade deal between both the countries will be finalised soon, White House Press Secretary Karoline Leavitt said on Tuesday (IST).

At a press briefing, Leavitt said that the Trump administration is finalising the agreements for the trade deal. "Yes, the President said that last week (that the US and India are very close to a trade deal), and it remains true. I just spoke to our secretary of commerce about it. He was in the Oval Office with the President. They are finalising these agreements, and you'll hear from the President and his trade team very soon when it comes to India," she said in response to a question by news agency ANI.

Leavitt also highlighted the strong relationship that Trump shares with Prime Minister Narendra Modi. When asked how the US views China's influence in the Indo-Pacific region, Leavitt said, "India remains a very strategic ally in the Asia Pacific and the President has a very good relationship with Prime Minister Modi, and he will continue to have that."

The White House press secretary's remark comes days after US President Donald Trump said that a "very big deal" with India will follow soon. "Everybody wants to make a deal and have a part of it. Remember a few months ago, the press was saying, 'Do you really have anybody of any interest?' Well, we just signed with China yesterday. We have one coming up, maybe with India. A very big one, where we're going to open up India," he said, adding that the US was seeking "full trade barrier dropping" along with greater access to the Indian market.

On July 9, the reciprocal tariffs announced by Trump are going to come into effect. While many nations have tried negotiating deals with the US, only the UK and China have been able to secure a deal so far.

The Centre also seems ready to push for a mutually beneficial deal with the US. Finance Minister Nirmala Sitharaman, in a conversation with Financial Express, confirmed the same. She said that India is not averse to finalising a comprehensive trade pact with the US, provided the nation’s core concerns, especially regarding farmers and livestock producers, are respected.

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