India Manufacturing Slows on US Tariffs

India's manufacturing sector experienced a significant slowdown in November, with its growth rate falling to a nine-month low. The HSBC India Manufacturing PMI, compiled by WSP Global, dropped to 56.6 from 59.2 in October. This deceleration is primarily attributed to tariffs imposed by the United States on Indian goods, including a 25% tariff in August and an additional 25% levy due to India's purchase of discounted Russian oil. The slowdown was also influenced by weaker export orders, cooling domestic demand, and intensified competition. Pranjul Bhandari, Chief India Economist at HSBC, highlighted that the boost from Goods and Services Tax (GST) cuts might be fading, failing to offset the tariff impact. Business confidence among manufacturers reached a 3.5-year low, reflecting concerns about geopolitical uncertainty and export competitiveness. India, through Commerce Secretary Rajesh Agrawal, is actively negotiating a framework trade deal with the United States to address these tariff issues. Despite the slowdown in manufacturing, India's GDP growth unexpectedly rose to 8.2% in Q2 FY26, though future quarters are expected to see a moderation.