India's manufacturing sector gained momentum in May, with business activity expanding at its fastest pace in three months, supported by strong domestic demand, infrastructure spending and an increase in new orders.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) rose to 55.0 in May from 54.7 in April, signaling a stronger improvement in overall manufacturing conditions. A PMI reading above 50 indicates expansion in activity, while a reading below 50 points to contraction.

The latest data suggests that robust demand from the domestic market continued to drive production and business growth, helping manufacturers navigate ongoing cost and inflationary pressures. The HSBC India Manufacturing PMI tracks key indicators such as new orders, output, employment, supplier delivery times and inventory levels to assess the health of the sector.