India’s manufacturing sector continued to strengthen in December with companies stepping up production and input buying amid efforts to rebuild their inventories following pandemic-driven business closures earlier in 2020, according to a private survey. Input cost inflation accelerated to a 26-month high in December, with panelists noting increased prices for chemicals, metals, plastics and textiles. Output charges were lifted in response to rising cost burdens, but here the rate of inflation was only marginal. The Reserve Bank of India (RBI) has projected the Indian economy to contract 7.5% in FY21, shallower than 9.5% contraction it projected just two months ago, on the back of a host of lead indicators, suggesting sustained economic recovery. It expects the economy to post 0.1% growth in December quarter and 0.7% in March quarter to end FY21 with 7.5% contraction. The finance ministry also expects marginal positive growth in the economy beginning December quarter.