India’s manufacturing sector expanded at a slower pace in March as rising costs, tough competition, and global uncertainties weighed on growth. The HSBC India Manufacturing PMI fell to 53.9 from 56.9 in February, marking the weakest improvement in nearly four years, though it remained in expansion territory.
Growth in new orders and output slowed to their lowest levels since mid-2022, with companies citing challenging market conditions and the impact of the Middle East conflict. Input costs rose sharply, reaching their highest level since August 2022, driven by higher prices for materials such as metals, fuel, and chemicals.
Despite this, companies only slightly increased their selling prices, as many chose to absorb higher costs to stay competitive and retain customers. Businesses continued to buy inputs and build inventory, partly to ensure smooth operations and avoid supply disruptions.
Employment increased at the fastest pace in seven months, supported by stock-building efforts and ongoing demand. Export orders also improved, with stronger demand from several global markets.
Although overall growth has moderated, manufacturers remain optimistic about future output, supported by improving external demand and efforts to clear backlogs.