India's manufacturing PMI jumps to 15‑month high in July
What's the story
India's manufacturing sector witnessed a significant boost in July, as the Purchasing Managers' Index (PMI) surged to a 15-month high of 58.8. The data, released on August 1, showed an increase from June's figure of 58.4. This is the second consecutive month that the index has remained above the critical 58 mark, indicating robust factory activity amid global uncertainties.
Economic indicators
Strong domestic demand fuels output expansion
The rise in PMI is a clear sign of strong domestic demand and continued output expansion. This development also supports India's broader economic recovery, which has been so promising that the International Monetary Fund (IMF) recently revised its FY26 growth forecast for India from 6.2% (projected in April) to 6.4%. The revision reflects an optimistic outlook on India's economic performance in the coming years.
Trade hurdles
US tariffs on Indian goods pose threat to growth
Despite the positive PMI data, India's growth outlook faces new challenges. US President Donald Trump's decision to impose a 25% tariff on Indian goods from August 1 could hurt export momentum and economic activity. Economists predict that these tariffs could potentially lower India's growth by up to 0.3% points in the current fiscal year, posing a major hurdle for the country's economic progress.