Activities in the manufacturing sector, which had slipped to a three-month low in May, picked up last month, driven by strong consumer demand, according to latest data. HSBC's final India Manufacturing PMI rose by 0.8 percentage points to 58.3 in June on the back of increased new orders and output. While inflation has remained above the long-run average, higher demand helped the manufacturers to earn improved margins.

It is notable that while consumer goods industry performed especially well in June, growth is also witnessed in the intermediate and investment goods categories. Another important finding is strong growth in export orders from regions like Asia, Australia, Brazil, Canada, Europe and the US, indicating better exports growth in coming days. Also, it is found that firms increased their hiring at the fastest pace in over 19 years.

While the last month data is encouraging, a latest report has made some more interesting projections. According to it, the Indian manufacturing sector, driven by the PLI scheme, may expand threefold by 2034 to reach a market size of $1.66 trillion from the current $459 billion. The report also anticipates that the contribution of the sector to the country’s GDP will rise to 21 percent from 14 percent in FY24.

Meanwhile, the Union Textile Minister announced that the PLI scheme for the textile sector may be expanded to all garments. This scheme has been a huge success in several sectors, driving, for example, mobile phone exports from the country to nearly $16 billion in FY24 and also enabling the pharmaceutical sector to attract Rs. 29,268 crore by May 2024. Experts expect similar performance from other sectors and expansion of the scheme to more sectors in coming days.

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