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According to a private poll, factory activity in India increased last month, boosted by a steady increase in demand as pandemic restrictions were removed, while rising energy prices pushed input costs to a five-month high.

After shrinking in March, international demand soared to a 9-month high, and domestic demand was above average.

S&P Global's Manufacturing Purchasing Managers' Index increased to 54.7 in April from 54.0 in March.

It came in over the 50-mark, which distinguishes growth from contraction, for the eighth month in a row, beating the Reuters poll's prediction of 53.8.

"Factories continued to ramp up output at an above-trend rate, with steady improvements in sales and input purchasing implying that growth will be sustained in the short future," said Pollyanna De Lima, S&P Global's economics associate director.

An loosening of Covid-19 limitations fueled this confidence, but a recent surge in coronavirus cases, as well as an electrical shortfall, could stymie industrial activity in the coming months.

In fact, relative to previous patterns, business expectations were muted. While some companies expected more growth in the coming year, others said it was difficult to foresee the future.

To keep inflation under control, the Reserve Bank of India is projected to boost its key interest rate in June and take a more aggressive rate hike path.