Introduction
India’s manufacturing growth lost momentum in November 2025. The HSBC India Manufacturing PMI slid to 56.6, its lowest in nine months — though still comfortably above the 50-point expansion threshold.
In this blog, we explore what drove the slowdown, what it signals for India’s economy going forward — including export demand, job growth, business sentiment — and how firms are responding.
AI Answer Box
Q: What happened to India’s manufacturing PMI in November 2025 — and why does it matter?
A: In November 2025, India’s manufacturing PMI dropped from 59.2 in October to 56.6 — the weakest pace of expansion in nine months. The slowdown is driven by softer domestic and export demand, rising uncertainty, and global tariff pressures (notably from the U.S.). Although the sector continues to expand, the cooling signals a potential deceleration in factory output, employment growth, and business confidence — raising concerns about near-term economic momentum.
Full Blog Content
H2: What Is PMI — And Why Does It Matter?
PMI stands for Purchasing Managers' Index, a widely-used indicator measuring the health of the manufacturing sector.
A PMI above 50 signals expansion; below 50 indicates contraction.
The index aggregates data on output, new orders, employment, input costs, supplier deliveries, and inventories — a sense of both current activity and future expectations.
For India, PMI offers a timely glimpse into industrial momentum — useful for policymakers, investors, businesses, and economists.
H2: November 2025 PMI — Key Facts & Figures
| Metric | October 2025 | November 2025 | Change / Note |
|---|---|---|---|
| HSBC India Manufacturing PMI | 59.2 | 56.6 | ↓ decline of 2.6 pts — 9-month low |
| Output & New Orders | Strong growth in October | Still growing, but weakest in 9 months | |
| Export Orders | Modest growth | Export orders rose at slowest rate in over a year | |
| Employment | Continued hiring | Hiring rose at slowest pace in 21-month expansion streak | |
| Input Cost Inflation | Elevated but stable | Eased to a nine-month low — firms could restrain prices | |
| Business Confidence / Future Outlook | Positive | Slipped to lowest level since mid-2022 |
Key insight: While manufacturing remains in expansion mode (PMI > 50), the pace of growth is clearly moderating. Weakness in new orders — especially export orders — and sluggish employment growth signal caution ahead.
H2: Why Did Manufacturing Slow Down in November 2025?
H3: Softer Export Demand & Global Headwinds
Growth in export orders decelerated to a 13-month low, pointing to less demand from overseas markets.
Global trade tensions and tariff policies — especially from key trading partners — appear to weigh on demand for Indian manufactured goods.
According to HSBC economists, tariff pressures are among the factors behind weakened external orders.
H3: Delayed Domestic Orders & Business Uncertainty
Firms reported project-start delays and more cautious ordering, reflecting market uncertainty.
Competitive pressures and a cooling of the temporary boost from tax reforms (e.g., GST) may also be contributing to muted domestic demand.
H3: Slower Hiring & Conservative Inventory Management
Employment growth slowed to its weakest in the 21-month expansion run — indicating caution among firms about future demand.
Firms increased purchasing and inventories — but only modestly. Finished goods inventories declined, suggesting companies were prioritizing selling from stock rather than new production.
H3: Input Cost Inflation Eases — But Confidence Falters
Input cost inflation eased to its lowest in nine months, giving firms some relief.
However, business confidence — as measured by expectations of future output — slipped considerably: firms pointed to international competition, demand uncertainty, and global volatility.
H2: What Does This Mean for India’s Economy — Short & Medium Term
H3: Implications for Growth
The slower manufacturing growth may weigh on overall industrial output and gross value added (GVA) in the near term.
Since manufacturing is a key employer and demand-driver, slowed hiring could affect livelihoods and domestic consumption.
H3: Export Vulnerabilities Highlighted
Weak export orders signal risks from global economic headwinds and trade tensions.
Export-oriented sectors may need to diversify markets or pivot to non-tariff-sensitive goods.
H3: Potential Relief via Lower Cost Pressures & Interest Rate Moves
Easing input cost inflation could reduce pricing pressure — helpful for margins and consumer affordability.
Some analysts suggest this may create room for the Reserve Bank of India (RBI) to consider monetary easing in upcoming policy reviews, if inflation stays benign.
H2: Expert Commentary & Real-World Context
As per Pranjul Bhandari — Chief India Economist at HSBC — “US tariffs played a key role in the slowdown; business confidence took a hit, and the initial boost from GST cuts may be waning.”
From ground-level conversations with industry managers, several common themes emerge:
Export-reliant manufacturers are exploring alternate markets (Middle East, Africa, Latin America) to offset U.S. demand slump.
Firms are adopting “just-in-time” inventory practices, avoiding excess stock due to demand uncertainty.
Hiring remains cautious — many prefer contract or temporary labour instead of full-time to keep costs flexible.
These steps — while prudent — also reflect the pressure weighing on capacity utilisation and growth plans.
Key Takeaways
India’s manufacturing PMI fell to 56.6 in November 2025 — its weakest in nine months — though still in expansion territory.
Main reasons: weaker export demand (tariffs, global slowdown), delayed domestic orders, cautious hiring and spending.
Despite softer growth, input cost inflation eased — giving some pricing and margin relief.
Business confidence dipped to the lowest in years — hinting at cautious outlook ahead.
The slowdown raises risks for industrial growth, employment, and exports — but also offers a window for policy actions (monetary easing, export diversification).
What Can Businesses & Policymakers Do?
Businesses — diversify export markets beyond traditional destinations; diversify product lines to reduce tariff sensitivity; adopt lean inventory and flexible labour policies.
Policymakers — consider export-support incentives; monitor trade tensions and work on trade agreements; evaluate monetary easing if inflation remains subdued.
Pros & Cons: November 2025 Manufacturing Slowdown
✅ Pros
Lower input cost inflation reduces margin pressure.
Inventory drawdown — firms sell from existing stock rather than oversupply.
May prompt firms to optimise operations — leaner, efficient practices.
❌ Cons
Weaker export and domestic demand may slow growth momentum.
Employment growth decelerates — affecting livelihoods and consumption.
Business confidence down — may delay investments and capacity expansion.
FAQs
What exactly is the PMI number for November 2025?
The PMI stood at 56.6 for November 2025.
Does 56.6 mean manufacturing contracted?
No. PMI above 50 still indicates expansion — but the rate of expansion has slowed significantly.
Why did export orders slow down?
Key reasons include global economic slowdown, increased tariff pressure (especially from the U.S.), and rising international competition.
Is input cost inflation rising?
No — input cost inflation eased to a nine-month low in November, helping firms moderate new price hikes.
What about employment in manufacturing?
Employment continued to rise in November — but at the slowest pace in the 21-month expansion streak.
Is this a temporary dip or a sign of deeper slowdown?
Hard to say definitively. While the sector remains in expansion, weaker orders and low confidence raise concerns. Much depends on external demand and domestic economic conditions.
How can manufacturers respond to this slowdown?
By diversifying export markets, controlling costs, managing inventory carefully, and being flexible with workforce.
Will this affect overall GDP growth?
Potentially yes — a sustained slowdown in manufacturing can weigh on industrial output, employment, and hence broader GDP growth.
Could this lead to price deflation or inflation?
With input cost inflation easing, pricing pressures may moderate. But if firms cut output, supply-side constraints could counteract that — so price movement will depend on demand-supply balance.
What sectors will feel the impact most?
Export-heavy sectors, export-oriented SMEs, manufacturers reliant on U.S. and other tariff-sensitive markets.
Can new policy actions reverse the slowdown?
Yes — export incentives, trade agreements, stable macroeconomic policy, and supportive monetary policy can help.
How long is this slowdown expected to last?
It depends on global demand recovery, trade environment, and domestic demand revival. If conditions improve, PMI may bounce back within a few months.
Should investors worry about manufacturing-heavy stocks?
Caution is warranted: weaker demand and lower business confidence can affect revenues. Diversification and a longer horizon approach may help.
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Published on : 1 st December
Published by : Reddy kumar
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