new delhi, Sept. 2 -- India's manufacturing activity expanded at its fastest pace in over 17 years in August, driven by stronger alignment between supply and demand, a private survey showed on Monday. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by financial intelligence solutions provider S&P Global, climbed to 59.3 in August from 59.1 in July. The index recorded a reading of 58.4 in June, 57.6 in May, and 58.2 in April. "Up from 59.1 in July to 59.3 in August, the seasonally adjusted HSBC India Manufacturing PMI-a single-figure indicator of sector performance-indicated the fastest improvement in operating conditions for 17-and-a-half years," the survey said. The last time PMI rose to above 60 was in 2008. "The upward movement in the headline figure largely reflected an acceleration in growth of production volumes," it added. The manufacturing PMI is based on monthly surveys of 400 manufacturers, and a reading above 50 indicates expansion. "Incoming new orders rose to broadly the same extent as in July, which was the fastest in 57 months. In addition to demand buoyancy, survey participants linked growth to advertising success," it said. "The strongest sales and output performances were noted in the intermediate goods category, followed by capital and then consumer goods," it added. The upbeat manufacturing momentum comes despite 50% US tariffs on Indian goods. As a result, data showed a softer increase in international orders placed with Indian manufacturers during August. "The rise was the weakest for five months, though sharp by historical standards. Firms reported having secured new work from clients in Asia, Europe, the Middle East, and the US," the survey added. August also brought a sharper rise in new orders, prompting firms to step up input purchases at a pace broadly unchanged from July. Among the main headwinds to growth, input costs continued to increase, with bearings, leather, minerals, steel and small electronic parts featuring in the report's "up in price" list. "India's manufacturing PMI hit another new high in August, driven by a rapid expansion in production. The increase of US tariffs on Indian goods to 50% might have contributed to the slight easing in new export orders growth, as American buyers refrain from placing orders in the midst of tariff uncertainty," said Pranjul Bhandari, chief India economist at HSBC. "Overall orders growth, on the other hand, held up much better, suggesting that domestic orders remained robust, helping to cushion against tariff-related drag on the economy. Manufacturers' continued optimism for future output is a positive sign," Bhandari added. Meanwhile, capacity pressures among producers remained subdued in August, as highlighted by a marginal increase in outstanding business volumes. "Firms generally noted an absence of pressure on supply chains, with average lead times shortening to a greater degree than in July," the survey added. Input inventories expanded at a sharp pace that was the second-quickest since April 2024 (behind July), the survey said. "The rise in holdings of finished items was relatively mild, but nevertheless ended an eight-month period of depletion," it added....