India's Manufacturing and Services Growth Slows Amid West Asia Energy Crisis: March PMI Insights
Synopsis
As tensions rise in West Asia, India's output growth has slowed in March, impacting both manufacturing and services, according to HSBC PMI data. Discover how these geopolitical issues and rising costs are influencing the economy.
Key Takeaways
Output growth in India has slowed in March.
The PMI Composite Output Index recorded 56.5.
Domestic demand is weaker, affecting new orders.
Cost pressures are rising, impacting profit margins.
Companies remain optimistic about future output levels.
New Delhi, March 24 (NationPress) India's output growth has experienced a slowdown in both the manufacturing and services sectors for March, influenced by the ongoing energy crisis amid tensions in West Asia, as reported by the HSBC Flash India PMI data on Tuesday.
The PMI Composite Output Index, which is a seasonally adjusted metric reflecting the month-on-month changes in combined output from India's manufacturing and service sectors, recorded a value of 56.5 in March.
According to Pranjul Bhandari, Chief India Economist at HSBC, weaker domestic demand has impacted new orders, which increased at the slowest rate in over three years, despite a significant rise in new export orders. Cost pressures have risen, prompting companies to absorb some of the increases by tightening their margins.
Factors such as the conflict in the Middle East, unpredictable market conditions, and inflationary trends have negatively affected growth. Input costs and selling prices surged at their highest rates in 45 and seven months, respectively.
There was a decline in the growth of new orders for both manufacturing and service companies. Overall, sales increased at the slowest rate since November 2022, according to data compiled by S&P Global.
Outstanding business volumes at the composite level rose for the fourth consecutive month in March, although the rate of increase was only marginal.
Data specific to the manufacturing sector indicated an uptick in purchasing levels and stocks by the end of the last fiscal quarter, though both growth rates have softened compared to February.
In terms of delivery timelines, companies noted a significant enhancement in vendor performance.
The PMI data indicated that firms have managed to absorb a substantial portion of their additional cost burdens, reflected by a rise in selling prices that lagged behind input costs significantly. Nevertheless, the inflation rate for charges was notable and marked the highest in seven months.
Private sector firms in India remain optimistic about boosting output levels over the next year, attributing this positivity to improvements in efficiency, marketing efforts, and inquiries from new clients.
Point of View
As output growth in both manufacturing and services sectors has slowed. This reflects broader challenges, including rising costs and geopolitical tensions that could affect the nation's economic stability.
NationPress
10 May 2026
Frequently Asked Questions
What is the PMI Composite Output Index?
The PMI Composite Output Index is a seasonally adjusted index that measures month-to-month changes in the combined output of a country's manufacturing and service sectors.
What factors are contributing to the slowdown in output growth?
The slowdown is influenced by weaker domestic demand, inflationary pressures, and the ongoing crisis in West Asia, which has impacted both manufacturing and services.
How do rising costs affect companies in India?
Rising costs place pressure on companies, leading them to absorb some of these increases by tightening their profit margins, which can hinder overall growth.
What does the future hold for India's output growth?
Despite current challenges, private sector firms remain optimistic about increasing output levels over the next year, driven by efficiency improvements and new client inquiries.
What was the PMI score for March?
The PMI Composite Output Index stood at 56.5 in March, indicating a deceleration in growth compared to previous months.
