Manufacturing in the country saw a substantial uptrend in June registering a three-month high on the back of stronger increase in new business orders, key macro-economic data showed on Friday.
The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) - a composite indicator of manufacturing performance - rose to 51.7 in June from 50.7 in May.
An index reading of above 50 indicates an overall increase in the economic activity, and below 50, an overall decrease.
"Supported by a stronger increase in new business inflows, Indian manufacturers raised production at a faster rate during June," financial services firm Markit, which compiles the monthly report, said in a release here.
"Rising from 50.7 in May, the headline index was at a three-month high at 51.7 in June," it said.
"Indian factories registered a welcome upturn in growth of both production and new orders mid-way through 2016, but producers clearly remain stuck in a low gear," said Pollyanna De Lima, economist at Markit and author of the report.
"The domestic market continues to be the main growth driver, as the Indian economic upturn provides a steady stream of new business. However, it looks as if lacklustre global demand remains a headwind for Indian manufacturers.
"Rates of expansion remain weak by historical standards, with the PMI average for April-June being lower than that seen in the prior quarter," she added.
De Lima said, however, that sustained growth of output and order books failed to encourage producers to raise employment.
"In fact, it has been roughly three years since the sector has seen any meaningful job creation," she said.
The Indian economy grew at 7.9 per cent in the fourth quarter of 2015-16, taking the overall GDP growth to 7.6 per cent for the entire fiscal.