India’s manufacturing sector continued to expand in December, closing 2025 on a stable footing despite a moderation in growth momentum. The Manufacturing Purchasing Managers’ Index eased to 55 from 56.6 in the previous month, remaining well above the 50 mark that separates expansion from contraction.
The latest data indicates that positive demand conditions continued to support growth in new orders and production. However, the pace of expansion softened due to competitive pressures and slower sales in select product segments. Even so, overall activity levels stayed above the long-term average, reflecting underlying resilience in the sector.
New business inflows rose at a strong pace, although the rate was the weakest in over a year. Output growth also moderated, marking its slowest expansion since late 2022. Input cost pressures remained subdued, with buying activity increasing at its least pronounced pace in nearly two years. Inflation related to input costs stayed historically low, while selling price inflation eased to a nine-month low.
Export demand showed signs of softness, with fewer firms reporting growth in overseas orders. Despite this, manufacturers benefited from improved demand across Asia, Europe, and the Middle East, helping sustain overall order books.
Looking ahead, manufacturers remain optimistic about output growth in 2026, supported by advertising efforts, new product launches, and steady demand trends. While some concerns persist around competition and market uncertainty, relatively low cost pressures are expected to support competitive pricing and attract new business in the coming year.
