India’s Manufacturing Sector Records Seven-Month High in September on Strong Demand

India’s manufacturing industry gathered fresh momentum in September 2026, with factory activity expanding at its fastest pace in seven months. The improvement was driven by stronger demand, rising new orders and increased production, signalling renewed strength across the country’s industrial sector.

The Manufacturing Purchasing Managers’ Index (PMI) climbed to 55.1 in September, compared with 52.8 in August, marking a significant acceleration in business activity. The reading remained comfortably above the 50-point level that separates expansion from contraction.

Manufacturers benefited from a notable increase in new business during the month. Demand strengthened across several segments, encouraging companies to raise output and increase purchases of raw materials. Export orders also improved, reflecting healthier demand from overseas markets.

The stronger order pipeline prompted businesses to build up inventories as companies prepared for continued sales activity. Growth in finished-goods stocks was particularly notable, suggesting that manufacturers are positioning themselves to meet potentially higher demand in the months ahead.

The improvement was also reflected in employment. After a decline in factory hiring in August, manufacturers returned to adding workers in September. The pace of job creation strengthened, pointing to greater confidence among businesses regarding future production and sales.

At the same time, manufacturers faced higher costs for several key inputs, including metals, electronic components and pharmaceutical materials. Companies responded by raising selling prices, although overall price increases remained relatively moderate.

Business sentiment also improved during September as manufacturers reported stronger enquiries and expectations of sustained demand. The combination of expanding orders, higher production, renewed hiring and improving confidence provided a stronger finish to the quarter for India’s factory sector.

The latest figures underline the continued importance of manufacturing to India’s economic expansion. With domestic consumption and export demand showing signs of improvement, manufacturers are entering the final months of 2026 with greater production activity and more positive expectations for business conditions.