India's manufacturing conditions improved for the fourth straight month in April due to healthy domestic demand conditions and growth in new export orders, a key macro-economic data showed on Tuesday.

The Nikkei India Manufacturing Purchasing Managers' Index (PMI), which is a composite indicator of manufacturing performance during April 2017, matched the index reading of 52.5 reported in March 2017.

An index reading of above 50 indicates an overall increase in economic activity, and below 50 an overall decrease.

"Buoyant domestic demand coupled with sustained growth of new orders from abroad boosted the upturn in total new business received by Indian manufacturers in April," said Pollyanna De Lima, economist at IHS Markit and author of the report.

"Having recovered at the beginning of the year from December's demonetisation-related contraction, growth of order books has gathered pace in each month since."

The report pointed out the "upturn in order books" was the most pronounced since last October.

"New export orders rose for the third month in a row, but the rate of expansion eased from March and was slight overall," the report read.

"Concurrently, output grew solidly, though growth softened slightly since the preceding survey period."
 

The report highlighted that the quantity of raw materials and semi-finished goods purchased by Indian manufacturers rose in April, in line with the trend recorded throughout the past four months.

"Purchasing costs increased for the nineteenth consecutive month in April, with panellists reporting higher prices paid for metals, chemicals and plastics," the report said.

"The rate of cost inflation gathered pace since March and was above the average recorded over the current sequence of rises."

In contrast, less than 5 per cent of manufacturers raised their output prices in April, while almost 93 per cent signalled no change.

"Where selling prices were raised, there were reports of the passing on of higher cost burdens to clients. Firms that reduced charges mentioned attempts to win new customers," the statement said.

Besides, the report revealed that goods producers were "most optimistic" since last November, with capacity expansion plans, new product developments, greater advertising and favourable market conditions expected to underpin output growth in the year ahead.

"The outlook appears encouraging too, with output expected to remain on an upward trajectory amid reports of planned capacity expansions, new product launches, aggressive marketing campaigns and an improving economic scenario," De Lima said.

In addition, the report disclosed that manufacturing jobs rose for the second consecutive month in April, which panellists related to a combination of greater production needs and expectations of a pick up in demand.