INDIA'S FACTORIES ROAR BACK, U.S. MANUFACTURERS TREAD WATER

India's manufacturing sector leaps to a 17.5-year high in August, while U.S. factories remain subdued—with new orders rising but output still contracting.

- By Team ET Now Machinist

August 2025 offered a snapshot of two very different manufacturing realities. In India, factory activity roared ahead to levels not seen in nearly two decades. In the United States, manufacturers continued to struggle, weighed down by tariffs, weak hiring and cautious production. India's manufacturing Purchasing Managers' Index climbed to 59.3, edging higher from 59.1 in July. It was the strongest improvement in operating conditions in seventeen and a half years. A PMI above 50 signals expansion, and anything close to 60 points to rapid growth. Behind the number was a surge in output, which expanded at its fastest pace since 2020 as supply chains caught up with demand.

New orders remained strong, matching July's levels and marking the best run in nearly five years. Intermediate goods led the way, but producers of capital and consumer goods also enjoyed healthy inflows. Domestic demand has been the real driver. Companies pointed to better advertising and distribution networks as reasons why orders kept flowing despite rising global trade headwinds.

Export demand grew more slowly. The United States' decision to raise tariffs on Indian goods to 50 percent late in August dampened momentum. Overseas orders still came in from Europe, Asia and the Middle East, but the pace of growth slowed to its weakest in five months.