The headline Purchasing Managers Index (PMI) figure released by HSBC on Monday said the index rose in June to 58.3 from 57.5 in May.
Growth in the Indian manufacturing sector recovered some of the ground lost in May.
Notably, a figure above 50 in the index denotes expansion and that below signifies contraction.
The recovery in the sector was based on the back of buoyant demand conditions that spurred the expansions in new orders, output and buying levels, it said.
Besides, firms raised employment at the fastest rate seen in more than 19 years of data collection.
The cost pressures receded from May, but were nevertheless among the highest over the past two years, leading companies to lift selling prices to the greatest extent since May 2022.
“Growth in the Indian manufacturing sector recovered some of the ground lost in May, with the headline PMI posting nearly five points above its long-run average. June data showed that buoyant demand conditions spurred the expansions in new orders, output and buying levels,” the survey noted.
It said that the performance of the consumer goods industry was especially strong, although substantial increases were also noted in the intermediate and investment goods categories.
“June saw a stronger expansion in sales at manufacturers in India. Buoyant underlying demand, higher export volumes and successful advertising all fuelled growth. As a consequence of ongoing increases in new order intakes, firms stepped up recruitment,” the survey said.
The survey further noted that June saw new export orders increase substantially again with companies attributing higher inflows of new work from overseas to better demand from Asia, Australia, Brazil, Canada, Europe and the US.