NEW DELHI (AFP) - India's manufacturing shrank for the first time in over four years last month, dealing a fresh blow to efforts to boost a slumping currency, figures showed on Monday, as rival China's factory activity rose.

The India purchasing managers' index (PMI), which gives a snapshot of manufacturing health from output to jobs, tumbled to an unexpected low of 48.5 last month from 51.1 in July, led by a slump in new orders. The index from HSBC is seen as a leading signal of economic momentum. A reading over 50 spells expansion of activity while one below 50 suggests contraction.

The data comes amid fears India's once-booming economy could be on the cusp of a full-blown crisis. The Indian figures suggest economic "growth is likely to slow further in coming months", said HSBC India chief economist Leif Eskesen, noting the fall was led by "a decline in new orders, especially export orders".

The Indian data contrasted with HSBC PMI figures showing China's manufacturing activity crossed the key level from contraction to expansion, rising to 50.1 last month from 47.7 in July and fuelling hopes the country's economy may be on the mend.

"We expect some upside surprises to China's growth in the coming months," said HSBC's chief economist for China Qu Hongbin.

The China data came after the official government manufacturing PMI climbed to a 16-month high of 51 in August. The Chinese climb was driven by recent stimulus measures and companies restocking inventories.

India's PMI finding was the lowest since a below-50 reading in March 2009.