The Nikkei India Manufacturing PMI -- a composite single-figure indicator of manufacturing performance – rose to 52.7 in July from 51.3 in June, logging a six-month high, indicating improvement in manufacturing business conditions of the country.

As per the survey, growth of new export business orders accelerated in July and was the most pronounced in five months. However, outstanding business orders got accumulated for the second month running.

A figure above 50 represents expansion while one below means contraction. "Growth in India's manufacturing economy rebounded in July, with PMI rising since the prior month. This reflects stronger increases of new orders and output. Furthermore, the sector was boosted by the quickest expansion in export orders since February," said Pollyanna De Lima, Economist at Markit, which compiles the data.

Despite the uptick in growth, Indian manufacturers continued to cut down workforce in July. Around 96 percent of respondents reported no change in staff strength from the levels in the prior month. "Although the latest data suggest that the manufacturing upturn gained traction, worries regarding the labour market persist," Lima stated, adding that "Continued job shedding highlights the concern felt by businesses towards the outlook, with firms failing to increase workforce numbers to any great extent since early 2014".

On prices, the survey cited the rate of inflation was only marginal and well below the series long-run trend. "While this is a generally positive set of data, upcoming PMI data releases will indicate whether the manufacturing sector can sustain this momentum," Lima said.

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