India’s Manufacturing PMI Dips to 48.7 Amid Trade Tensions

India’s manufacturing sector contracted for the first time in nearly a year as the PMI fell sharply to 48.7 in July, indicating cooling industrial activity. The decline reflects subdued export demand, especially from auto and electronics sectors, exacerbated by rising input costs and looming US tariffs set to take effect August 7. Manufacturers report pressure from heightened raw material prices and logistics challenges that disrupt supply chains and increase production costs. Policymakers are reportedly considering targeted incentive packages to support domestic manufacturing amid ongoing global uncertainties.

Despite near-term setbacks, structural reforms and sustained domestic consumption provide a foundation for recovery. Companies like Maruti Suzuki are recalibrating strategies by amplifying export focus and adopting new mobility solutions. The government’s push for value-added production and renewable energy investments is expected to foster resilience and innovation over the medium term. Industry watchers highlight that India’s manufacturing renaissance hinges upon navigating geopolitical headwinds and leveraging infrastructure development.