India Manufacturing Roars: PMI 59.2 – GST Rocket Fuel Ignites Boom

In October, the HSBC India Manufacturing PMI shot up to 59.2, well above the 58.4 flash estimate and a jump from September’s 57.7, marking the fastest growth we've seen in months. Thanks to the GST Council's significant two-slab reform (5% & 18%) that took effect on September 22, domestic demand really took off—new orders soared, output hit a five-year high, and companies have been hiring more for the 20th consecutive month. Upgrades in tech and boosts in productivity have really kicked efficiency into high gear, plus input buying is moving at its fastest rate since May 2023 as businesses stock up confidently.

While export growth has slowed down to its lowest this year, the domestic market is more than making up for it. Input cost inflation is down to an eight-month low, but companies are still raising output prices to a 12-year high for the second month in a row, taking advantage of strong demand to pass on freight and labor costs. Optimism among businesses is high, driven by the benefits of GST, capacity expansion, and aggressive marketing efforts—putting everything in place for ongoing momentum as we head into FY 2025-26.

This isn’t just a strong PMI report—it shows that bold tax reform along with intense domestic spending can really kick manufacturing into high gear, even with global challenges out there. With the IIP already showing a 4.8% increase in September, India’s manufacturing sector is truly firing on all cylinders. Manufacturing 2.0 has arrived—and it’s here to stay.