India Manufacturing Growth Slows to Lowest Level Since 2022

India's manufacturing sector experienced its slowest growth pace in nearly four years in March 2026, with the HSBC India Manufacturing Purchasing Managers' Index falling to 53.9 from 56.9 in February. According to data compiled by S&P Global, this represents the weakest improvement in business conditions since June 2022.

Pranjul Bhandari, Chief India Economist at HSBC, attributed the slowdown to disruptions linked to conflict in the Middle East, specifically involving Iran and the Strait of Hormuz. These tensions triggered the steepest cost pressures for aluminum, chemicals, fuel, and steel since August 2022. Despite these sharp input price increases, manufacturers absorbed much of the expense to maintain market share, resulting in the lowest uptick in selling charges in two years.

While domestic demand and new orders softened, the sector saw its strongest expansion in external sales since September. Employment growth also hit a seven-month peak as firms hired to clear backlogs and build contingency stocks. Despite the March dip, manufacturers maintain a positive outlook for the year, with sentiment reaching its highest level since May 2024 due to agricultural strength and planned capacity expansions.