New Delhi [India], March 24 : India's private sector activity in March slowed to its weakest pace since October 2022, as ongoing tensions in the Middle East, rising inflationary pressures and unstable market conditions weighed on growth, according to the latest PMI data released by HSBC.
The HSBC Flash India PMI Composite Output Index, which measures the combined output of manufacturing and services, declined from 58.9 in February to 56.5 in March, marking the slowest pace of expansion in nearly three-and-a-half years.
HSBC stated "March data highlighted the weakest expansion in Indian private sector output since October 2022.... The HSBC Flash India PMI® Composite* Output Index - a seasonally adjusted index that measures the monthon-month change in the combined output of India's manufacturing and service sectors - fell from a final reading of 58.9 in February to 56.5 in March, highlighting the weakest pace of growth in close to three-and-a-half years".
The data highlighted that the slowdown was primarily driven by weaker domestic demand for goods and services, even as international orders rose to the strongest level in the survey's history.
Companies cited the Middle East war, inflationary pressures and market instability as key factors dampening growth.
The report noted that the largest slowdown was seen in the manufacturing sector, where goods producers indicated that the conflict in the Middle East weighed on production growth by increasing uncertainty, raising inflation and restricting demand. Factory output growth in March was the slowest since August 2021.
The services sector also witnessed moderation, with business activity growth easing to its weakest level since January 2025. Firms pointed to disruptions in international travel and the impact of joint strikes by the US and Israel, along with Iran's counterattacks, as factors affecting demand.
Overall sales growth across the private sector slowed to its weakest pace since November 2022, reflecting softer increases in new orders for both manufacturing and services companies.
The report also highlighted rising inflationary pressures, with input costs increasing at the fastest pace in close to four years. A wide range of items, including aluminium, chemicals, electronic components, energy, food, iron ore, leather, oil, rubber and steel, recorded higher prices.
Selling prices also rose at the fastest rate in seven months, indicating that businesses are passing on higher costs to customers.
Despite the slowdown in growth, companies continued to expand their workforce. Employment rose at a moderate pace, which was the fastest since last August, supported by confidence in future business activity and pending orders.
Manufacturing data showed further increases in buying activity and inventory levels, although the pace of growth slowed compared to February. Supplier delivery times improved, indicating better vendor performance.
The HSBC Flash India Manufacturing PMI also declined from 56.9 in February to 53.8 in March, marking a four-and-a-half-year low.
So while the India's private sector continues to expand, growth momentum has weakened significantly amid geopolitical tensions and rising cost pressures.
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