In the month of May, India's manufacturing sector grew at the fastest pace in three months on improved output and new orders.
The Nikkei Manufacturing Purchasing Managers' Index (PMI), based a private monthly business survey, showed an increase to 52.7 in May, as against the previous month's 51.8. In April, the manufacturing PMI had hit its eight-month low.
The index has remained above the 50-mark (which separates growth from contraction) for the 22nd straight month.
The survey found that there has been increased optimism about the manufacturing activity in the coming year which could be attributed to PM Narendra Modi's dramatic win in the general elections 2019 on the mandate of business friendly policies.
Almost 70 percent of the responses in the survey were collected after exit polls results that suggested a clear win for the BJP-led NDA alliance.
"A revival in new order growth promoted a faster upturn in manufacturing production, as Indian firms sought to replenish inventories utilised in May to fulfill strengthening demand," Pollyanna De Lima, principal economist at IHS Markit, said in a release.
The new business orders sub-index, which tracks overall demand, improved from an increase in foreign demand at the fastest pace in three months. Output also reportedly grew at the strongest rate since February.
The pace of hiring was also increased in comparison to the previous month, on the same account.