New Delhi, May 2 : India's manufacturing activity surged to a 10-month high of 58.2 on the purchasing manager's index (PMI) in April, compared with 58.1 in the previous month, driven by higher exports and domestic demand, according to a HSBC India survey released on Friday.

A reading above the critical 50 mark on the PMI denotes expansion in manufacturing activity, while a decline below this number reflects contraction.

"Respondents attributed growth to better domestic and international demand. With the sole exception of January, new business from abroad grew to the greatest degree in over 14 years at the start of the 2025/26 fiscal year," the survey noted.

HSBC India's Chief Economist Pranjul Bhandari said that the increase in new export orders in April may indicate a potential shift in production to India, as businesses adapt to the evolving trade landscape and tariff announcements by the United States.

Consumer goods companies reported the fastest increase among various sectors. A sharp rise in new business was a key factor for the latest improvement in output growth.

"Manufacturing output growth strengthened to a ten-month high on robust orders. Input prices increased slightly faster, but the impact on margins could be more than offset by the much faster rise in output prices, of which the index jumped to the highest level since October 2013," Bhandari said.

The higher growth during the month was also accompanied by an increase in employment. Manufacturers continued to hire employees in April to meet growing output requirements. As many as 9 per cent of survey participants took in extra workers, who were offered a combination of permanent and temporary contracts.

On the inflation front, while input costs rose at the fastest pace in four months, output inflation increased to an 11-and-a-half-year high, as companies continued to transfer costs.

Business optimism also rose in April. "Strong optimism regarding output prospects over the coming year was evident in the April data, driven by expectations of demand strength," the survey added.

/IANS