Daijiworld Media Network – New Delhi

New Delhi, Jul 1: India's manufacturing sector surged to a 14-month high in June, powered by robust international demand and a sharp rise in new export orders, according to the HSBC India Manufacturing Purchasing Managers’ Index (PMI) released on Tuesday.

The PMI rose to 58.4 in June from 57.6 in May, marking the highest level since April last year. A reading above 50 indicates expansion in the manufacturing activity.

"Robust end-demand fuelled expansions in output, new orders, and job creation," said Pranjul Bhandari, Chief India Economist at HSBC. Factory output grew at its fastest pace in over a year, backed by a surge in new orders, especially from global markets.

Export orders posted the third-strongest growth since March 2005, with the US emerging as a key driver, the survey noted.

The boom in demand also sparked record-breaking job creation, as manufacturers hired at the fastest rate since the PMI survey began over two decades ago.

Despite some rise in iron and steel prices, input cost inflation eased to a four-month low. However, companies continued to increase selling prices, passing on freight, labour and material costs to consumers—though at a slightly slower pace than in May.

While business optimism remained strong, confidence dipped to an eight-month low due to concerns over inflation, competition, and changing consumer trends.

The upbeat data comes as India’s trade negotiations with the US face hurdles ahead of a July 9 deadline, with disagreements over tariffs on auto parts, steel, and agricultural goods clouding the talks.