Growth in India's manufacturing sector in May surpassed expectations, with the seasonally adjusted manufacturing PMI rising to 55, a three-month high.
The HSBC India Manufacturing PMI, released by S&P Global, indicated continued stockpiling amid the ongoing conflict in West Asia.
Manufacturers stepped up purchases, new orders, and output at a faster pace than in April, with stockpiling gaining strength as a result.
The data showed that domestic demand provided the main boost, while new export orders rose at a softer but still solid pace.
Firms reported higher international sales to markets in Asia, Europe, Kenya, Nigeria, and West Asia, despite cost pressures remaining elevated.
Input prices rose sharply, with only April seeing a stronger increase in the past 45 months, but factory gate prices rose at a solid pace.
Despite sharp increases in input costs, manufacturers stepped up purchases of raw materials in May, with buying activity rising at the fastest pace in three months.
Employment continued to rise at a solid pace in May, although growth eased from April, and business confidence remained positive.
