India's manufacturing sector showed significant growth in May, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) climbing to 55, up from 54.7 in April. This increase reflects the strongest expansion in three months, driven by robust domestic demand and ongoing infrastructure projects. The PMI has remained above the neutral mark of 50 for 55 consecutive months, indicating sustained growth. Notably, the fastest increases in new orders and output were observed in the intermediate and capital goods sectors. However, the ongoing conflict in the Middle East has contributed to rising input costs, which saw their second-highest increase in 45 months. Despite this, many manufacturers chose not to pass these costs onto consumers due to competitive pressures. Job creation within the sector continued, although at a slower pace compared to April. Overall, the data suggests a positive outlook for India's manufacturing industry, although challenges remain due to inflationary pressures.