India's manufacturing sector expanded at its fastest pace in 31 months in May, as new orders and output grew at a faster pace, a private survey showed on Friday.

The S&P Global India Manufacturing Purchasing Managers' Index (PMI) rose to 58.7 in May from 57.2 in April, marking the highest reading since March 2021. A reading above 50 indicates expansion, while a reading below 50 indicates contraction.

The growth was driven by strong demand from both domestic and export markets. New orders rose at their fastest pace in 13 months, while output expanded at its fastest pace in four months.

The survey also showed that input costs continued to rise in May, but at a slower pace than in April. This was due to a decline in the prices of crude oil and other raw materials.

The strong performance of the manufacturing sector is a positive sign for the Indian economy. The sector accounts for about 15% of India's gross domestic product.

The government has set a target of 7.5% growth for the current financial year. The strong performance of the manufacturing sector is likely to help the government achieve its growth target.

Some of the factors that contributed to the growth of the manufacturing sector in May included strong demand from both domestic and export markets, decline in the prices of crude oil and other raw materials and Government policies that have boosted investment and growth.

The government is taking steps to further boost the manufacturing sector, such as simplifying the regulatory environment and providing incentives to businesses. These measures are expected to help the sector grow at a faster pace in the coming months.