In April, despite a slight decline from the previous month, India's manufacturing activity remained robust, registering a PMI of 58.8, down from March's 16-year high of 59.1, according to the HSBC Purchasing Managers' Index.

This figure comfortably stayed above the pivotal 50-mark, indicating expansion rather than contraction, and surpassed the long-run average of 53.9. The manufacturing sector initiated the fiscal quarter on a strong note, experiencing the second-fastest pace of improvement in operating conditions in over three years.

Buoyant demand drove a sharp increase in new business intakes, prompting firms to boost production. Consequently, raw material stocks were accumulated at the third-fastest rate in the survey's 19-year history. Pranjul Bhandari, Chief India Economist at HSBC, highlighted the positive outlook, with increased staffing levels reflecting firms' confidence in future prospects.

However, cost pressures mounted, leading to the highest charge inflation since January, attributed to rising prices of materials like aluminium, paper, plastics, and steel. Despite this, firms managed to pass on these cost increases to consumers through higher output charges, buoyed by resilient demand.

New orders surged sharply, driven by both domestic and external demand, with domestic markets playing a pivotal role in growth. While job creation moderated in April, it marked the quickest pace since September 2023. Operating capacities experienced mild pressure, with a slight increase in outstanding business volumes.