India manufacturing: On a front-loading high

Research evidence excerpt

India manufacturing: On a front-loading high

29 July 2026

India manufacturing Economics

On a front-loading high India

◆ Renewed Middle East tensions and looming US Section 301 tariffs are driving Aayushi Chaudhary

another bout of inventory front-loading Economist,Sri Lanka India, Indonesia &

HSBC Securities and Capital

◆ June industrial production surprised to the upside; output of select segments like Marketsaayushi.chaudhary@hsbc.co.in(India) Private Limited

electrical equipment, electronics and plastic strengthened in 2Q +91 22 2268 5543

Pranjul Bhandari

◆ July PMI, too, points to the fastest finished-goods stock build-up since 2015 Chief India Economist/Strategist, ASEAN

alongside rising input inventories; new export orders picked up too Economist The Hongkong and Shanghai

Banking Corporation Limited,

Singapore Branch

Renewed tensions in the Middle East have once again prompted firms to build buffers to manage the pranjul.bhandari@hsbc.com.sg

uncertainties around the longevity of the supply-side shock. At the same time, there were worries around +65 6658 4976

higher tariffs linked to the implementation of Section 301. The government of India estimates that about Priya Mehrishi

Associate Economist

55% of exports will attract the additional 10% duty (PIB, 25 July 2026). Back in April-May, the HSBC Securities and Capital

manufacturers were building inventories to hedge against the risk of energy-input shortages (see India: A Markets (India) Private Limited priya.mehrishi@hsbc.co.in

case of manufacturing front-loading, 23 April 2026). We’re now seeing a similar front-loading dynamic in +91 97391 69567

the recently released June industrial production and July Flash PMI data.