By Mudit Dube

Copyright newsbytesapp

India’s manufacturing sector witnessed a slowdown in growth last month, marking its slowest pace in four months. The decline comes as factory gate prices have skyrocketed at the fastest rate in nearly 12 years. The HSBC India Manufacturing Purchasing Managers’s Index (PMI), compiled by S&P Global, dropped to 57.7 in September from August’s stronger reading of 59.3. The PMI is a key indicator of economic health, with readings above 50 indicating growth in activity on a monthly basis. The recent drop in India’s manufacturing PMI suggests that the sector is facing challenges. These challenges include rising input costs and intense competitive pressures, which have led to a moderation in new orders and output expansion. Despite the slowdown, new export orders have picked up pace from last month. Pranjul Bhandari, HSBC’s chief India economist, said this indicates that demand outside the US may be compensating for any decline in demand from the US due to tariffs. Meanwhile, business confidence has risen to a seven-month high. Firms attribute their optimism to tax relief from recent goods and services tax rate changes and expectations of favorable demand in the year-ahead outlook.