India's manufacturing sector experienced a slowdown in December 2025, with the Purchasing Managers' Index (PMI) falling to 55.0, its weakest growth in two years, and a 38-month low in some metrics. While new orders and output expanded, their growth rates moderated due to competition and softer demand. Export orders also saw a significant slowdown, rising at the slowest pace in 14 months. Despite this, the sector remained in expansion territory, with subdued cost pressures and a positive outlook for domestic business expected to support activity.