Indian manufacturing activity grew at its fastest rate for three months in April, following a slump in March.
ABN Amro Bank's purchasing managers' index (PMI) rose to 53.8 in April from 53.0 in March, the lowest level since the index began in 2005.
Activity had been slowing as a result of rate rises from the Reserve Bank of India, but it decided to leave the cost of borrowing unchanged last week.
Any reading on the PMI above 50 indicates conditions are improving.
There was more good news for manufacturers, with the input price index falling fell to 52.7 in April from 53.9 in March.
"The reversal in the PMI's trend is encouraging, especially since it is accompanied by a fall in input price inflation," said Abheek Barua, chief economist, India, at ABN Amro Bank.
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