India Manufacturing PMI declined to a five year low in July, but remains in expansion

Economics Research 3 August 2026 | 12:26PM IST

India: Manufacturing PMI declined to a five-year low in July, but remains in expansion

Bottom line: The seasonally adjusted HSBC India manufacturing purchasing Santanu Sengupta | managers’ index (PMI) declined to a five-year low, but remained in expansion at 53.5 Goldman Sachs India SPL in July from 54.2 in June mainly due to a decline in the employment index to 50.3 Arjun Varma from 50.8 in June. New export orders rose to a three-month high of 54.3 in July from | 52.1 in June as firms reported gains from Canada, Indonesia, South Africa, Thailand Goldman Sachs India SPL

and the UAE. Among the price-related sub-indices, the input price index declined to a five-month low, while the output price index increased.

HSBC India manufacturing PMI: 53.5 in July vs. 54.2 in June

n The seasonally adjusted HSBC India manufacturing purchasing managers’ index (PMI) declined to a five-year low of 53.5 in July from 54.2 in June, but in expansion. n Among the five major sub-indices, output increased to 56.4 in July from 56.3 in June, with firms indicating that advertising and robust demand underpinned sales. New export orders also rose to a three-month high of 54.3 in July from 52.1 in June as firms reported gains from Canada, Indonesia, South Africa, Thailand and the UAE as per the press release (Exhibit 1). However, the employment index declined for the third consecutive month to a 2.5-year low of 50.3 from 50.8 in June n Among the price-related sub-indices, the input price index declined to a five-month low of 54.2 from 54.7 in June. Firms reported higher costs for transportation. The output price index however increased to 52.3 from 52.2 in June (Exhibit 2), suggesting some pass-through of earlier input price increases.

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Exhibit 1: Manufacturing PMI declined to a five-year low in Exhibit 2: Input prices declined to a five-month low in July July mainly due to lower employment, while overall output increased

Index (50 = No Change) Index (50 = No Change) Index (50 = No Change) Index (50 = No Change) 60 60 65 65 Manufacturing PMI: Input prices 60 Output prices 60 55 55

50 50 Manufacturing PMI: 50 50 Overall Manufacturing Employment New export orders 45 45 45 45

Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Jul-25 Jan-26 Jul-26 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Jul-25 Jan-26 Jul-26

Source: Haver Analytics, Goldman Sachs Global Investment Research Source: Haver Analytics, Goldman Sachs Global Investment Research