Manufacturing Activity Reaches Four-Month High in February at 56.9

India's Manufacturing Activity Surges to Four-Month High in February

Key Takeaways:

• India's Manufacturing Purchasing Managers' Index (PMI) rose to 56.9 in February, up from 55.4 in January, marking the strongest expansion since October.
• The PMI reading above 50 indicates expansion in activity, reversing the softness seen toward the end of 2025.

Economic Growth Moderation

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India's economic growth eased to 7.8% in the October-December quarter, according to new GDP series data released on February 27. This moderation in growth was preceded by a revision higher to 8.4% in Q2 and a lowering of the first quarter estimate to 6.7%.

Manufacturing Leads the Recovery

The manufacturing sector emerged as a key bright spot in the latest GDP numbers, expanding 13.3% year-on-year in Q3, accelerating from 13.2% growth in the previous quarter. This strength may be extending into the final quarter of the fiscal year, supported by the rise in PMI readings in February.

Growth Outlook Remains Steady

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For the full year, the Indian economy is expected to grow around 7.6%, implying that activity in the January-March quarter is likely to remain broadly aligned with current trends rather than see a sharp acceleration.