Concurrently, factory gate charges were broadly unchanged in June. Where average selling prices remained the same as in May, at 95% of firms, panellists reported efforts to remain competitive.

There was broadly no change to manufacturing employment in India during June, with some panellists reporting sufficient staff to work on both new and existing projects and others noting shortages of skilled labour in the country.

Finally, there were diverging trends with regards to stock levels in June, as post-production inventories dipped and holdings of purchases increased.

Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Economist at Markit and author of the report, said: "Indian factories registered a welcome upturn in growth of both production and new orders mid-way through 2016, but producers clearly remain stuck in a low gear. Rates of expansion remain weak by historical standards, with the PMI average for April-June being lower than that seen in the prior quarter and thereby signalling a softer contribution from the sector to overall GDP during this period.

"The domestic market continues to be the main growth driver, as the Indian economic upturn provides a steady stream of new business. Nonetheless, there were also signs of an improvement in overseas markets, as new foreign orders rose in June following a decline in May. However, it looks as if lacklustre global demand remains a headwind for Indian manufacturers.

"Sustained growth of output and order books failed to encourage producers to raise employment. In fact, it has been roughly three years since the sector has seen any meaningful job creation.

"Another key aspect from the latest PMI results is the trend in prices. Purchasing cost inflation softened, while selling prices were broadly unchanged. This lack of inflationary pressures provides the RBI with further leeway to boost economic growth through cutting its benchmark rate."
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