The Purchasing Managers' Index (PMI) from HSBC India Manufacturing, which gives a snapshot of manufacturing health from output to jobs, stood at 52.9 in October, compared with 52.8 last month.

A figure of over 50 indicates growth in the sector while below 50 points to contraction.

"Economic activity in the manufacturing sector picked up slightly thanks to firm new orders," said HSBC chief economist Leif Eskesen.

"New export orders increased for the second successive month," he said, adding however that persistent power shortages weighed on production.

The survey's findings -- based on data from more than 500 manufacturers -- come after the government announced a slew of reforms in September to revive economic growth, which is stuck around three-year lows of 5.5 percent.

But Eskesen said in the report that "the recovery in manufacturing growth is likely to be slow and inflation is likely to stay elevated for a while".

Earlier this week, India's central bank kept its benchmark interest rate on hold due to inflationary pressures, disappointing government and business leaders who wanted a cut to boost the economy.