India's Manufacturing Sector Sees Weakest Growth in Nearly Four Years
India’s manufacturing registers weakest growth in nearly four years: PMI survey shows
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India's manufacturing sector growth slowed significantly in March 2026, with the HSBC India Manufacturing Purchasing Managers' Index (PMI) dropping to 53.9 from 56.9 in February, marking the lowest level since June 2022. Rising costs, competition, and geopolitical tensions are impacting new orders and output.
- 01PMI fell to 53.9, indicating the weakest growth since June 2022.
- 02Cost pressures intensified, with input costs rising sharply across various items.
- 03External demand provided some relief, with strong export orders reported.
- 04Employment levels increased, reaching the highest growth in seven months.
- 05Outstanding business volumes declined for the first time in 18 months.
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India's manufacturing sector experienced its weakest growth in nearly four years, as indicated by the HSBC India Manufacturing Purchasing Managers' Index (PMI), which dropped to 53.9 in March 2026 from 56.9 in February. This decline reflects rising cost pressures, intense competition, and geopolitical uncertainties, particularly due to the ongoing conflict in West Asia. The PMI, which measures overall business conditions, fell below its long-run average of 54.2, signaling a slowdown in both new orders and output. Despite these challenges, external demand showed resilience, with manufacturers reporting the strongest expansion in export orders since last September. Additionally, firms increased employment levels significantly, marking the highest growth in seven months. The survey also noted that outstanding business volumes decreased for the first time in nearly 18 months, attributed to additional hiring and a slower rise in new orders. Overall, the manufacturing sector remains a crucial driver of India's economic growth, projected to expand by 11.5% in the current financial year.
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The slowdown in manufacturing growth could lead to reduced job creation and slower economic expansion, affecting workers and businesses reliant on the sector.
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