India's Manufacturing PMI Hits Four-Year Low Amid Global Tensions

Original: PMI slows to lowest level in 4 years in March

The Economic Times•Apr 3, 20262 min

In a Nutshell

In March 2026, India's Manufacturing Purchasing Managers' Index (PMI) fell to 53.9, the lowest level since June 2022, primarily due to rising costs and reduced demand linked to the ongoing conflict in the Middle East. This slowdown indicates increased market uncertainty and cost pressures affecting manufacturers.

Key Points

01The HSBC India Manufacturing PMI dropped from 56.9 in February to 53.9 in March 2026.
02This marks the lowest PMI reading in nearly four years, indicating a slowdown in manufacturing activity.
03Cost pressures intensified, with input prices rising at the fastest rate in over three and a half years.
04The war in the Middle East has negatively impacted demand and new order levels.
05Manufacturers are absorbing increased input costs, keeping output prices stable.

In-Article Ad

Full Summary

The HSBC India Manufacturing Purchasing Managers' Index (PMI) fell sharply from 56.9 in February to 53.9 in March 2026, marking the lowest level since June 2022. This decline reflects a slowdown in manufacturing activity driven by rising costs and reduced demand, exacerbated by the ongoing conflict in the Middle East. The report highlights that growth in new orders and output has slowed significantly, with the two largest sub-components of the PMI experiencing their weakest growth rates since mid-2022. Input prices surged, with materials like aluminium, chemicals, and steel seeing the most significant increases in over three and a half years. Pranjul Bhandari, chief India economist at HSBC, noted that the disruptions from the Middle East conflict are affecting global economic conditions and contributing to greater uncertainty for Indian manufacturers. Despite these pressures, firms are currently absorbing much of the cost increases, maintaining relatively stable output prices.

Key Figures