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India's manufacturing sector activity eased in the month of May but remained above the neutral level of 50.0 in June, as surging demand for Indian goods translated into higher sales figures for manufacturers, which underpinned another robust expansion in input purchasing as firms actively procured resources to support production growth. According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to 57.8 in June from 58.7 in May.

The report noted that Indian goods producers registered a sharp increase in new work intakes during June, and one that was among the strongest seen since February 2021. Concurrently, new export orders rose solidly, though at a slower pace than in May. To meet rising sales, companies ramped up production in June. The expansion in output was sharp and among the fastest over the past year-and-a-half. Suppliers to the Indian manufacturing sector were comfortably able to meet rising demand for inputs.

On the inflation front, supported by buoyant client appetite, manufacturers lifted their selling prices in June. The rate of charge inflation was marked, the strongest in 13 months and above its long-run average. In certain cases, the upturn was attributed to higher labour and input costs. Although average purchasing prices continued to increase in June, the rate of inflation was mild by historic standards and among the lowest seen over the past three years.