India’s manufacturing sector continues to show strong resilience and momentum, buoyed by a sharp increase in new export orders, according to the latest data released for June 2025. This marks a sustained period of industrial expansion, reinforcing the country’s growing prominence in global supply chains.
The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) stood at 58.6 in June, only slightly down from 58.9 in May, signalling robust growth in output, new orders, and employment. Most notably, new export orders saw their fastest rise in over a year, driven by increased demand from key markets including the United States, the European Union, and Southeast Asia.
Key Growth Drivers
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Export Demand Boom:
Indian manufacturers recorded a notable acceleration in international demand, especially for goods in pharmaceuticals, electronics, engineering products, and textiles. Export orders grew at their fastest pace since April 2023, suggesting that geopolitical shifts are favouring India as a manufacturing hub. -
Domestic Resilience:
The domestic market continued to provide a strong buffer, with consistent consumer demand, infrastructure-driven public spending, and a recovery in discretionary purchases boosting production. -
Inventory and Hiring Gains:
Businesses reported an uptick in input purchasing and job creation, signaling confidence in future demand. Firms are also ramping up inventories to avoid future supply disruptions and to meet rising export commitments.
Industry Commentary
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, noted:
“India’s manufacturing performance in June is a reflection of favourable global positioning, rising competitiveness, and improving supply chain stability. Export strength, in particular, is a welcome trend as firms diversify markets.”
Policy and Strategic Context
The continued strength in manufacturing aligns with India’s industrial roadmap under the ‘Make in India’ and ‘Production-Linked Incentive (PLI)’ schemes. Government incentives, easing compliance norms, and infrastructure investments have encouraged both domestic and foreign firms to expand manufacturing bases.
The Centre is also actively engaging in bilateral trade agreements and positioning India as a trusted global partner in electronics, defense, and semiconductors — sectors showing high momentum in export growth.
Challenges Ahead
Despite the overall positive outlook, manufacturers expressed concerns over:
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Rising input costs, especially in energy and logistics.
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Global uncertainties, including inflation in Western markets and possible geopolitical escalations.
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Skilled labour shortages in advanced sectors like semiconductors and precision engineering.
However, most firms reported high optimism for the coming 12 months, with over 70% of respondents expecting further output growth.
India’s manufacturing sector continues to build on strong foundations, powered by buoyant export demand, policy support, and resilient domestic consumption. As global firms seek diversified sourcing and supply bases, India’s agile and competitive manufacturing ecosystem is well-positioned to take centre stage in the evolving global economy. The surge in export orders not only strengthens industrial confidence but also signals a new chapter in India’s journey from a regional supplier to a global manufacturing powerhouse.
