India's manufacturing PMI jumps to 59.2 in October on GST relief: All you need to know

India’s manufacturing sector posted robust growth in October, with the HSBC India Manufacturing Purchasing Managers’ Index (PMI) climbing to 59.2 from 57.7 in September, according to data released by S&P Global. The jump marks the sharpest improvement in five months, driven by strong domestic demand, GST relief measures, and higher technology investments that strengthened production momentum.

Manufacturing expands at fastest pace in five months

The report highlighted that business conditions improved across the manufacturing sector as domestic orders surged through October. A rise in new orders boosted both factory output and purchasing activity, leading to a sharp build-up of inventories. While export orders also increased, the pace of growth was the weakest in ten months, indicating that India’s manufacturing expansion was largely led by domestic consumption rather than overseas sales.

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“The seasonally adjusted HSBC India Manufacturing PMI rose from 57.7 in September to 59.2 in October, signalling a quicker improvement in the health of the sector,” the report said.

Domestic demand drives confidence and capacity build-up

Producers ramped up input purchases to support the rise in output, with buying activity growing at the fastest pace since May 2023. This reflected stronger business confidence among manufacturers expecting steady demand in the months ahead.

Capacity pressures remained contained, with only a slight rise in outstanding workloads. Firms said the modest backlog increase was due to healthy demand rather than any production delays. Supplier delivery times improved notably, marking the best performance in four months.

Inventories of raw materials and semi-finished goods rose at the second-fastest rate since records began in 2005, only behind May 2023. Finished goods inventories also edged higher as several companies continued to meet orders from existing stockpiles.

GST relief and reforms lift business sentiment

Manufacturers remained optimistic about the months ahead, citing policy support such as GST relief and expectations of ongoing reforms to streamline production and logistics. Firms also anticipated benefits from marketing initiatives and planned capacity expansion. India’s factory performance underscores the economy’s resilience amid global headwinds, with domestic consumption and fiscal measures supporting industrial growth.