India's manufacturing growth eases to 9-month low in November as tariffs hit exports: PMI

India’s manufacturing growth cooled in November to its slowest pace since February, dragged by softer domestic demand and the weakest rise in export orders in over a year, a private survey showed on Monday.

The HSBC India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 56.6 in November from 59.2 in October.

In the PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

“India’s final November PMI confirmed that US tariffs caused the manufacturing expansion to slow,” said Pranjul Bhandari, chief India economist at HSBC. “The new export orders PMI fell to a 13-month low… The boost from the cuts in GST may be fading and it might be insufficient to offset the tariff headwind to demand.”

Manufacturers reported a substantial rise in overall order book volumes, supported by competitive pricing and healthy domestic demand. But the pace of growth was capped by challenging market conditions, project delays and rising competition.

Cooling demand led manufacturers to slow hiring and purchasing activity. Employment rose at the weakest rate in the current 21-month expansion streak, while buying volumes increased at the slowest pace since February.

Input cost inflation fell to a nine-month low, allowing firms to raise selling prices only modestly, with output charge inflation slipping to an eight-month low.

Business confidence weakened sharply, falling to its lowest since mid-2022, as companies cited concerns over intensifying domestic and global competition.

Going ahead, companies remained confident of a rise in output over the coming 12 months, but positive sentiment fell to its lowest level in nearly three-and-a-half years.

"Downgraded forecasts stemmed from concerns around a competitive landscape, including competition from international firms, as anecdotal evidence showed," the report said.

The HSBC India Manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.