New Delhi, Feb. 3 -- India's manufacturing activity ticked up in January after slipping to a two-year low a month earlier, but business confidence sank to its weakest level in more than three years, a private survey showed. The HSBC India Manufacturing Purchasing Managers' Index (PMI) rose to 55.4 in January from 55.0 in December, according to data compiled by S&P Global. The PMI has stayed above the 50.0 threshold, which separates growth from contraction, since July 2021. Confidence among manufacturers, however, fell to a three-and-a-half-year low, with just 15% of companies surveyed expecting output growth in the year ahead and 83% forecasting no change. The survey said that Indian goods producers reported faster increases in new orders, output, employment and purchasing activity during January after losing growth momentum at the end of 2025. "Input prices rose to the greatest extent in four months, albeit one that was negligible by historical standards, while charge inflation eased further," it said. The seasonally adjusted PMI, derived from measures of new orders, output, employment, supplier delivery times and stocks of purchases, signalled a stronger improvement in overall operating conditions. "Indian manufacturing firms saw a rebound in January, driven by increased new orders, output, and employment. Input costs rose moderately, while the pace of growth in factory-gate prices eased, resulting in slight margin pressure for manufacturers. Despite faster growth in new orders, business confidence remains muted, and expectations for future output have declined to their lowest level since July 2022," said Pranjul Bhandari, chief India economist, HSBC. Consumer goods emerged as the strongest segment, while capital goods recorded the slowest improvement in operating conditions, the statement said. Survey participants cited buoyant demand, new business wins and technology investment as supporting production. Output rose sharply and at a quicker pace than in December. Domestic demand remained the main driver of sales. New export orders also increased, but at one of the weakest rates in 15 months, with firms pointing to higher demand from Asia, Australia, Canada, Europe and West Asia. Competitive pricing helped lift volumes, as output charges rose only modestly and at the weakest pace in nearly two years. Many firms said improved efficiency, better cost management and intense competition limited their ability to raise prices. The improvement in manufacturing activity comes against the backdrop of geopolitical volatility and steep 50% tariffs imposed by the US on India. The PMI data follows the Economic Survey for FY26 projecting economic growth of 7.4% in the ongoing fiscal (FY27), driven by consumption and investment. The survey pegged real GDP growth for FY27 at 6.8-7.2%. Presenting the Union budget for FY27, finance minister Nirmala Sitharaman on Sunday outlined measures aimed at sustaining growth, expanding opportunities across regions and sectors, strengthening the financial system and accelerating adoption of cutting-edge technologies, including artificial intelligence....