Following December's strongest improvement in 60 months, growth momentum across India's manufacturing economy lost some impetus as output, new orders and employment rose at slower rates during January.

Encouragingly, new export orders rose at the sharpest pace since September 2016. On the price front, input cost inflation remained marked and broadly similar to December's eight-month high. In spite of increased cost pressures, firms were restricted in their ability to fully pass these on to clients due to intense competition. As a result, charges rose only marginally.

The Nikkei India Manufacturing Purchasing Managers' Index® (PMI®) fell from December's 60-month high of 54.7 to 52.4 in January. This was consistent with a modest improvement in operating conditions across India's goods producing economy. Notably, the headline PMI Index registered below the long-run average (54.1). Growth was registered across all three broad market groups, led by consumer goods.

Production levels increased during January, thereby extending the current period of expansion to six months. Where an increase was registered, firms commented on stronger underlying demand

conditions. Although solid, the rate of expansion eased to the weakest since October and was below the series average.

At the same time, new order book volumes increased for the third consecutive month. Although solid, the rate of growth eased to the slowest in this sequence.

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