India’s Manufacturing PMI Slips to 54.7 as Export Orders Reach Six‑Month High

The concrete rupture is reflected in the latest PMI reading released by the Institute for Supply Management, which showed a decline from the previous month’s 55.3. Surveyed firms reported weaker new orders for domestic consumption, a slowdown in capacity utilisation, and modest hiring, suggesting that the post‑pandemic recovery is losing momentum. Nevertheless, export orders climbed to a six‑month peak, driven by demand for textiles and automotive components in the Middle East and Africa.

Underlying tension stems from persistent supply‑chain bottlenecks, rising input costs, and policy uncertainty surrounding the upcoming Union Budget. Manufacturers cite volatile fuel prices and a shortage of skilled labour as impediments to scaling production. At the same time, the government’s emphasis on “Make in India” has created expectations that may outpace the sector’s ability to meet them without substantial investment in technology and infrastructure.

The downstream consequences are multifold. Companies are likely to postpone capital expenditures, which could temper job creation in industrial hubs such as Maharashtra and Gujarat. Export‑driven firms may benefit from foreign exchange earnings, yet the overall slowdown could pressure the current‑account balance if domestic demand does not rebound. Analysts warn that without targeted fiscal incentives, the manufacturing sector’s contribution to GDP growth may fall short of the 7 % target set for 2027.