India's Manufacturing Growth Slows to Two-Year Low in December 2024

India's manufacturing sector expansion decelerated to its weakest pace in two years in December 2024, as the HSBC India Manufacturing Purchasing Managers Index (PMI) compiled by S&P Global fell to 55.0 from 56.6 in November. This decline marks the lowest reading since December 2023, signaling a material shift in momentum for the world's fastest-growing major economy, which had posted over 8% growth in the July-September quarter.

The slowdown is primarily attributed to weakening domestic demand, which has been identified as the main drag on manufacturing activity. New orders rose at their slowest pace in two years, while the employment index slipped to its weakest level since early 2024, hovering just above the expansion threshold of 50. Factory production also saw its slowest increase in 38 months, further illustrating the challenges faced by the sector.