The manufacturing sector in India makes a significant contribution to GDP. Robust growth has been seen in India’s manufacturing sector in January. The country’s manufacturing sector growth climbed to a near eight-year high in January. The year 2020 started with robust growth in the manufacturing sector. January month saw a sharp rise in new business and production, a private survey showed on Monday.
The Indian economy has already witnessed a slowdown in the last financial year. A constant slowdown in the Indian economy raised government’s eyebrows. This good news comes at a time when India is facing an economic slowdown. The Indian economy has slowed down sharply in recent years. Good growth in the manufacturing sector may help India revive the economy.
“Manufacturing sector growth in India continued to strengthen in January, with operating conditions improving at a pace not seen in close to eight years,” said Pollyanna de Lima, Principal Economist at IHS Markit.
The manufacturing PMI has been recorded above the 50-point mark in January after several years. After seeing a sharp jump in sales, factories started hiring new employees at the fastest rate in more than seven years. If the manufacturing sector sees constant growth in the coming months, there will be a huge advantage for India to achieve the $5 trillion target set by the Modi government.
“The PMI results show that a notable rebound in demand boosted the growth of sales, input buying, production and employment as firms focused on rebuilding their inventories and expanding their capacities in anticipation of further increases in new business,” Pollyanna De Lima, principal economist at IHS Markit, said in a news release.
The Nikkei Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, rose to 55.3 last month from 52.7 in December. It was the highest growth since February 2012 and above the 50-mark separating growth from contraction for the 30th straight month.
India is already going through a recession as India’s economy grew at its slowest pace in more than six years as per the July-Sep period. The growth decreased to 4.5 percent from 7.0 percent a year ago, according to government data.
This has been made possible by new orders and strong growth in output. After seeing sharp growth in manufacturing sector activity in the month of January, factories started hiring new workers and many industrialists will probably open new factories in India and that will further boost the manufacturing sector.