Although the reading was revised lower from the flash estimate of 57.5, it marked a four-month high and pointed to a notable improvement in operating conditions across the sector.
A PMI reading above 50 indicates expansion compared to the previous month.
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S&P Global said, “A substantial improvement in domestic demand for Indian goods fuelled new order intakes and spurred the greatest upturn in production volumes for four months.”
Output expanded at the fastest pace in four months and at a rate above its long-run average. The report noted that “efficiency improvements, healthy underlying demand, rising intakes of new work and tech investment collectively boosted production volumes.”
New orders continued to grow sharply, with the pace of expansion the strongest since October. However, growth in export demand slowed further. “February’s increase was the slowest in 17 months,” the report said, with export growth broadly converging towards its long-run average.
Commenting on the data, Pranjul Bhandari, Chief India Economist at HSBC, said: “India’s final manufacturing PMI reflected an acceleration in manufacturing activity in February. Output expanded at a faster rate for a second month, supported by stronger domestic orders.”
Employment rose slightly during the month, but at the fastest pace in four months. The report stated that job creation was supported by rising outstanding business volumes, with backlogs increasing to a seven-month high.
However, Bhandari said, “growth in new export orders continued its slowing trend that began in mid-2025,” which, to some extent, restricted employment creation in the sector.
Input purchases climbed at the fastest pace in three months. Pre-production inventories also increased sharply and at a pace well above the long-run trend.
On prices, cost pressures remained moderate. The release said, “The rate of inflation was moderate and equal to January’s.” However, companies raised selling prices at a faster rate, with output charge inflation accelerating and outpacing its long-run average.
Looking ahead, firms remained optimistic, with around 16% of companies forecasting higher output over the coming year, while fewer than 1% expect a decline, supported by marketing initiatives and favourable demand conditions.
Data for the survey were collected between February 9 and 23.
