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.