India’s manufacturing sector showed signs of moderation in December 2025, with the HSBC India Manufacturing Purchasing Managers Index (PMI) falling to a two-year low of 55.0, down from 56.6 in November 2025.
Despite the decline, the index remains above the 50-mark that separates expansion from contraction, indicating continued growth in the manufacturing sector. The slowdown was attributed to easing growth in new business orders, production, and employment.
Experts note that the moderation is partly seasonal and reflects global demand uncertainties. However, the underlying fundamentals of Indian manufacturing remain strong, supported by robust domestic consumption and infrastructure spending.
The government’s focus on ‘Make in India’ and production-linked incentive (PLI) schemes continues to attract investments in manufacturing. Key sectors including electronics, pharmaceuticals, and automobiles are seeing capacity expansions.
Looking ahead, analysts expect manufacturing activity to pick up in 2026, supported by improved global trade conditions, lower interest rates, and continued government support for the sector.
