India’s private sector growth weakened in March, marking the slowest expansion since October 2022. The slowdown was mainly due to softer domestic demand, even as international orders surged to a record high. Businesses reported that geopolitical tensions in the Middle East, volatile market conditions, and rising inflation affected overall performance.
The HSBC Flash India Composite Output Index dropped from 58.9 in February to 56.5 in March, indicating slower growth across manufacturing and services. Manufacturing saw the sharpest decline, with output growth hitting its lowest level since August 2021. Companies cited global uncertainty and rising costs as key challenges. The services sector also expanded at a slower pace, with disruptions to international travel affecting activity.
New orders grew at the weakest rate since November 2022, although export demand remained strong across multiple regions. Meanwhile, input costs rose sharply, reaching a near four-year high, driven by higher prices for raw materials and energy. Although companies increased selling prices, they absorbed much of the cost pressure.
Despite these challenges, firms continued hiring, supported by positive business expectations. Overall, companies remain optimistic about growth in the coming year, backed by improved efficiency and new business opportunities.