India’s Exports Surge to 3.5 Year High in April: HSBC PMI Data

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India’s manufacturing sector experienced its second-fastest pace of improvement in over three years in April, according to the latest HSBC PMI data.

“April’s manufacturing PMI recorded the second fastest improvement in operating conditions in three-and-a-half years, bolstered by strong demand conditions which resulted in a further expansion of output, albeit slightly slower than in March,” said Pranjul Bhandari, Chief India Economist at HSBC.

Robust Demand and Expansion

The surge in market demand has been a driving force behind this growth, with firms witnessing a significant increase in new intakes and ramping up production.

Despite a slight dip compared to the previous month, the HSBC India Manufacturing PMI remained above the neutral mark of 50.0, indicating the sector’s good health. The data reveals a substantial expansion of input stocks, reaching levels unprecedented in over 19 years.

Employment Market and Operational Capacity

To meet the rising demand, manufacturers have been hiring additional staff at the quickest pace since September 2023.

However, pressure on operating capacities remained mild, with a slight increase in outstanding business volumes.

Domestic Market Driving Growth

While new export orders also increased, the domestic market remained the primary driver of growth. Both domestic and external clients contributed to the high demand for Indian goods, resulting in a sharp rise in total new orders.

Optimistic Outlook and Inflation

Indian manufacturers are optimistic about higher output levels in the coming year, supported by strong business confidence and expectations of sustained demand.

Despite an uptick in cost pressures, inflation rates remained below long-run averages. However, manufacturers responded by raising selling prices, contributing to a three-month high in charge inflation.

India’s manufacturing sector has continued its robust performance, driven by strong demand both domestically and internationally.

While cost pressures persist, manufacturers remain optimistic about future growth prospects, buoyed by effective marketing strategies and a positive economic outlook.