India’s Manufacturing Slows to 9-Month Low at 56.6 in November, Still Strongly in Expansion Mode

India’s manufacturing sector saw a notable moderation in November, slipping to a nine-month low of 56.6, according to the HSBC Manufacturing Purchasing Managers’ Index (PMI). The reading is down from 59.2 in October, marking the first time since March that the index has fallen below 57.

Despite the decline, the PMI remains firmly in expansion territory and continues to sit above its long-run average, signalling that the sector is still growing, although at a slower pace.

Manufacturing PMI Dips After Strong Q2 Surge

The latest moderation follows a particularly strong performance in the previous quarter. During July–September, manufacturing GVA rose 9.1%, the fastest pace in six quarters. This momentum significantly contributed to India’s 8.2% GDP growth, an 18-month high for the country.

The November PMI drop indicates a cooling-off after months of strong factory output, production momentum, and a supportive economic environment that had pushed the index above 59 in October.

Yet, experts still view the slowdown as a normalization rather than a sign of weakness, especially since the PMI remains well above the 50-point mark that separates expansion from contraction.

First Dip Below 57 Since March

The decline to 56.6 is significant because the PMI has not fallen below 57 since March. This nine-month low reflects softer output, new orders, and production activity compared to the previous month.

However, the index’s position above historical averages shows that India’s manufacturing sector continues to operate on strong fundamentals, even as high-frequency indicators begin to normalize after an exceptionally strong quarter.

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Economists Expect Economic Resilience in H2 FY26

Economists quoted in the report believe that the broader Indian economy is still expected to remain resilient through the second half of the fiscal year.

With the first two quarters already delivering strong results, many projections suggest that India is on track to record around 7% GDP growth for FY26. This optimism persists even as some high-frequency indicators—including PMI—reflect moderation rather than acceleration.

The PMI data, therefore, is seen as part of the natural economic cycle following the strong growth witnessed earlier in the fiscal year.

Growth Already Front-Loaded, Normalization Begins

As per the details available in the report:

• India’s manufacturing PMI dropped from 59.2 to 56.6 between October and November.

• Q2 manufacturing GVA grew 9.1%, the highest in six quarters.

• India’s overall Q2 GDP rose 8.2%, an 18-month high.

• Many economists expect around 7% growth for FY26, despite the slowdown in some indicators.

The report notes that with strong growth registered in the first half of the fiscal year, economic activity for the rest of the year may stabilize at more moderate levels.

Still an Expansion: Manufacturing Momentum Remains Positive

The PMI remaining above 56 points is a positive sign for the economy. Historically, readings above 55 indicate solid expansion in manufacturing output, business orders, and activity levels.

Even after the decline:

• The index is well above the long-term average,

• Signals continued expansion,

• And reflects positive sentiment across the sector.

Thus, while the November reading represents a slowdown, it does not indicate contraction or demand weakness.

Q2 Strength Continues to Support Outlook

The strong Q2 performance—driven largely by manufacturing’s 9.1% GVA growth—provided a substantial push to the GDP print. The momentum created earlier in the year continues to provide a supportive backdrop even as PMI numbers show a shift toward more moderate growth levels.

This combination of earlier strength and current stability is why economists expect the broader economy to maintain resilience in the months ahead.

India Likely to Maintain ~7% Growth for FY26

Based on the report, many analysts believe India remains on track to deliver approximately 7% economic growth for FY26. This view is supported by:

• Strong performance in the first half,

• Continued expansion in manufacturing,

• High but moderating PMI readings,

• And positive economic sentiment.

The moderation in November, therefore, does not change the broader growth trajectory built through H1 FY26.

A Developing Story

The update provided is part of a developing story, and more details may emerge as additional data releases come in. The article encourages readers to check back for updates as more information becomes available.

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