Indian manufacturers enjoyed a solid improvement in operating conditions during August. With demand from the domestic and external markets picking up, companies raised output accordingly. Firms recorded an easing in cost inflation during the month, which in turn resulted in a softer overall increase in factory gate charges.

Climbing from 51.8 in July to a 13-month high of 52.6 in August, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - showed a solid improvement in the health of the sector.

Contributing to this was a sharp upturn in new business inflows, which expanded at the fastest pace since December 2014. Consumer goods producers led the increase, although solid growth was also seen in the intermediate and capital goods categories.

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