India’s manufacturing activity eased to a three-month low in June, with the Purchasing Managers’ Index (PMI) slipping to 54.2 from 55.0 in May, signalling a moderation in factory momentum even as the sector remained firmly in expansion territory.
A PMI reading above 50 indicates expansion, while a reading below that level signals contraction.
June’s print was the weakest since March (53.9), suggesting manufacturing growth lost some pace toward the end of the first quarter of FY27 as the West Asia crisis continued to impact growth.
Despite the moderation, factory activity remains healthy by historical standards. The average manufacturing PMI for the April–June quarter stood at 54.6, lower than 57.9 in the same period last year, pointing to a softer start to FY27 compared with FY26.
Manufacturing momentum has been gradually cooling from last year’s highs. The index touched 59.3 in August 2025, the highest reading in the current data series, before trending lower amid signs of softer demand and persistent cost pressures.
The latest reading extends India’s manufacturing expansion streak, underscoring the sector’s resilience despite global uncertainty, geopolitical tensions and volatile commodity prices.
Elevated input costs—particularly from energy and imported commodities—continue to pose risks to margins, while external demand remains uneven.
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