The S&P Global HSBC India Manufacturing Purchasing Managers' Index (PMI) is a monthly, survey-based economic indicator (concept) that provides a timely gauge of the health of India's manufacturing sector. Data collection for the index began in March 2005 to track and gauge month-on-month changes in business conditions. It is compiled by S&P Global and is currently sponsored by HSBC.
The index works by surveying purchasing managers in a panel of around 400 manufacturers, asking them to report on changes in key business variables compared to the previous month. The headline PMI is a seasonally adjusted, weighted average of five sub-indices: New Orders (30%), Output (25%), Employment (20%), Suppliers' Delivery Times (15%), and Stocks of Purchases (10%). The index is expressed as a number between 0 and 100. A reading above 50 signals an overall expansion in the manufacturing sector compared to the previous month, a reading below 50 indicates a contraction, and a reading of 50 indicates no change.
The PMI is considered a "leading indicator" because it reflects forward-looking business sentiment and expectations. This makes it a complement to the government-compiled Index of Industrial Production (IIP), which is a "lagging indicator" that measures the actual volume of production. The India Manufacturing PMI is also part of a broader set of global PMI surveys compiled by S&P Global and is combined with the India Services PMI to form a Composite PMI. The index's compilation entity changed following the merger of IHS Markit with S&P Global in 2022, but the core methodology and the five weighted components have remained consistent.