Mint Quick Edit | Indian factories need to get both busier and better

The HSBC India manufacturing PMI dropped to 56.3 in February from 57.7 in January. Last month’s reading is the lowest in 14 months. Local demand seems to have cooled, which led order books filling up with less vigour. 

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On the brighter side, overseas demand seems to be holding up. Besides, despite the PMI fall, it remains well in expansion territory. Still, it does raise questions of a slowdown in a sector being relied upon to generate jobs. 

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Data last week had shown India’s GDP grew 6.2% in the last quarter of 2024, up from the previous quarter’s 5.6% expansion, but the factory sector’s performance remained below par. It grew just 3.5% in the quarter ended 31 December. 

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Global conditions add a dose of uncertainty to its revival prospects, with US President Donald Trump’s plans on trade policy having clouded supply-chain cost projections globally. While India accounts for only a sliver of world trade, emerging as a big manufacturing hub requires clarity on tariff barriers. Till then, factories should work on raising their competitiveness.