Manufacturing Activity Rebounds in October, HSBC PMI Rises to 59.2

India’s manufacturing sector recorded a strong rebound in October 2025, boosted by festive-season demand and recent GST rate rationalisation, according to data released on November 3. The HSBC Manufacturing Purchasing Managers’ Index (PMI) rose to 59.2 in October, up from 57.7 in September, marking the fifth month this year the index has stayed above the 58-mark.

A PMI reading above 50 indicates expansion in manufacturing activity, showing that the industrial sector continues to perform strongly despite broader economic moderation.

Festive Demand and GST Cuts Drive Growth

The uptick in manufacturing activity reflects the positive impact of festive spending across sectors and the government’s GST rate cuts, which have made consumer goods more affordable. These factors have provided a timely boost to factory output and improved overall business sentiment.

Economists say the October surge suggests that India’s industrial sector began the third quarter of FY26 on a solid footing, even as the Reserve Bank of India (RBI) expects economic growth to moderate slightly in the second half of the fiscal year.

Also Read: Groww Anchor Book Sees ₹50,000 Crore Bids, Oversubscribed 15 Times Ahead of IPO

Economic Growth Outlook

India’s economy grew 7.8% in Q1 FY26, its fastest pace in five quarters, and is expected to expand around 7% in Q2, as per RBI estimates. However, growth may ease to 6.2% by the final quarter, with the central bank projecting below 6.5% growth in H2 FY26.

Despite this moderation, the recent data reflect a resilient and stable manufacturing base, supported by domestic demand and policy tailwinds.

Global Institutions Revise India’s Growth Forecast Upward

Adding to the optimism, global financial institutions have upgraded India’s growth outlook in recent weeks.

• The International Monetary Fund (IMF) now expects 6.6% GDP growth for FY26, up from its earlier estimate of 6.4%.

• The World Bank has also raised its projection to 6.5% from 6.3% previously.

These revisions underscore India’s strong macroeconomic fundamentals and the continued strength of its manufacturing and services sectors.

Manufacturing Sector Shows Continued Resilience

This is the fifth time in seven months that India’s Manufacturing PMI has remained above 58, highlighting consistent industrial expansion despite global uncertainties. The 59.2 reading in October reflects robust production levels and sustained demand momentum, indicating a strong start to Q3 FY26.

Conclusion

With the combination of festive demand, GST cuts, and steady factory output, India’s manufacturing sector has maintained impressive resilience and growth momentum. While economists foresee a gradual moderation in the overall economy, the latest PMI data points to a confident and stable industrial outlook for the months ahead.