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India manufacturing momentum strengthens as PMI climbs to four month high in February
India’s factory activity accelerated in February, with the manufacturing PMI rising to 56.9, signalling sustained industrial strength despite uneven GDP growth during the year. The data reinforces manufacturing’s role as a stabilising pillar of the economy heading into the final quarter of FY26.
By Finblage Editorial Desk
11:00 am
2 March 2026
India’s manufacturing sector showed renewed vigour in February, with activity expanding at the fastest pace in four months, providing a counterweight to broader economic moderation seen in recent quarters. The Purchasing Managers’ Index (PMI) for manufacturing rose to 56.9 from 55.4 in January, indicating robust expansion across factory output, new orders, and business conditions. A reading above 50 denotes growth in activity.
The rebound comes at a time when India’s growth trajectory has displayed uneven momentum through the fiscal year. Official data released late February showed GDP growth easing to 7.8 percent in the October–December quarter, even as earlier quarters were revised. Growth for the second quarter was revised up to 8.4 percent, while the first quarter estimate was lowered to 6.7 percent, underscoring volatility in underlying demand conditions.
Against this backdrop, manufacturing has emerged as a critical support to the economy. Sectoral data indicates factory output expanded 13.3 percent year on year in the December quarter, marginally faster than the previous quarter’s 13.2 percent pace. The latest PMI reading suggests that this strength is not only intact but may be gaining traction as the fiscal year draws to a close.
Several structural drivers appear to be sustaining factory activity. Domestic demand remains resilient, supported by government infrastructure spending, urban consumption, and steady order pipelines. Export conditions, while still subject to global uncertainties, have not deteriorated enough to derail production plans. Inventory rebuilding after earlier softness in late 2025 may also be contributing to the current upswing.
The improvement is particularly notable because it comes despite a moderation in headline growth expectations. The economy is projected to expand around 7.6 percent for the full fiscal year, implying that the January-March quarter is unlikely to deliver a sharp acceleration. Instead, policymakers and markets are looking for stability and manufacturing is increasingly filling that role.
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