India’s March private business activity slows to lowest since Oct 2022, missing forecasts
MANGALURU, India – September 05: A general view shows part of the Mangalore Refinery and Petrochemicals Limited (MRPL) refinery in Mangaluru, India on September 05, 2025. India’s vast oil refinery complexes are among the largest in the world, processing millions of barrels of crude oil every day to meet growing domestic and export demand.
Abhishek Chinnappa | Getty Images News | Getty Images
India’s private sector activity fell to its lowest level since October 2022 in March, as weak domestic demand for goods and services offset the largest increase in international orders, according to the HSBC Purchasing Managers’ Index compiled by S&P Global.
HSBC’s flash India Composite Purchasing Managers Index (PMI) slowed to 56.5 in March from 58.9 in February and was below the Reuters poll median of 59.0.
A PMI reading above 50.0 indicates growth, while a reading below this level indicates contraction.
India’s factory activity slowed to 53.8 from 56.9 in February, below the survey expectation of 56.8. In the world’s fastest growing economy, the services sector was at 57.2, below analysts’ forecast of 58.3.
According to the statement made by S&P Global, “Companies stated that the Middle East war, unstable market conditions and inflationary pressures reduced growth. Input costs and sales wages increased at the fastest rates in 45 and seven months, respectively.”
India’s private sector business activity has been on the rise since the beginning of 2026, but the US-Israeli war with Iran has negatively affected the economy.
” The situation in West Asia is alarming right now,” Indian Prime Minister Narendra Modi told parliament on Monday.
He added that “the difficult global conditions caused by this war are likely to continue for a long time” and urged Indians to “remain prepared and united” as they have during the Covid-19 pandemic.
India is among Asian countries particularly vulnerable to the effects of a protracted conflict in the Middle East, as it faces an energy crisis and disruptions to key aviation and trade routes.
High energy prices are also expected to increase India’s current account deficit; While this has contributed to the weakening of the local currency, the rupee is also expected to hit record lows in recent days.
Business confidence had earlier improved after India finalized trade deals with its two major partners, the United States and the European Union, earlier this year. According to HSBC PMI dated February 20, private companies in India last month recorded a rapid increase in total new orders and international sales, prompting them to hire additional staff and increase their production.
