The IHS Markit India Manufacturing Purchasing Managers' Index (PMI), the composite indicator of manufacturing performance showed an index reading of 52.5 in July 2019, up from 52.1 in the previous month.
An index reading of above 50 indicates an overall increase in economic activity, or growth, and below 50 an overall decrease.
"Economic growth in India's manufacturing industry was sustained in July. Companies scaled up production in response to a quicker upturn in factory orders," IHS Markit said in a statement.
"This, coupled with optimistic growth projections, underpinned job creation and an uptick in input purchasing," it added.
As per the PMI survey results, consumer goods producers led the upturn in July for the third month in a row, although there was also a stronger improvement in business conditions at intermediate goods makers.
However, the capital goods sub-sector dipped into contraction, with lower sales causing reductions in output and quantities of purchases, while job creation came to a halt.
According to Pollyanna de Lima, Principal Economist at IHS Markit: "Following a slowdown in growth in the opening quarter of fiscal year 2019/2020, some momentum was regained in July."
"Measures for factory orders, production and employment improved in the latest month, although rates of expansion remained below trend. A similar pattern was evident for business confidence," she said.
( With inputs from IANS )