India’s HSBC Manufacturing PMI rose to 55.0 in May 2026, a three‑month high, up from 54.7 in April and revised upward from the flash estimate of 54.3. The expansion was driven by stronger growth in new orders, output and purchasing activity, primarily supported by robust domestic demand as export momentum weakened.
Sales were buoyed by intermediate and capital goods, reflecting ongoing infrastructure investment and recent business wins. Manufacturers stepped up input purchases for stockpiling, with pre‑production inventories increasing as supply conditions improved and delivery times shortened. Inventories of finished goods also climbed, reaching an 11‑year high as supply outstripped demand.
Employment continued to grow, but at a slower pace, while backlogs of work edged higher. On the cost side, input prices rose sharply, driven by higher energy, fuel, raw material and transport costs associated with geopolitical tensions. However, output price inflation remained comparatively contained as firms limited the pass‑through of higher costs to customers. Business confidence stayed positive, underpinned by solid order pipelines and expectations of easing cost pressures.
