Private sector activity eases in March to 58.6; business confidence hits 7-month low

Rising competition and the threat of tariffs were also a reason to keep manufacturing activity growth in check, as input price pressures accelerated during the month, while output inflation was at its weakest rate in 12 months.

Manufacturing likely performed better from the previous month rising to 57.6 in March, recovering from a 14-month low of 56.3 in February but will still be below 57.7 recorded at the start of the year.

"India’s manufacturing sector expanded at a faster pace in March… the margin squeeze on manufacturers intensified as input price inflation ticked up while factory gate prices rose at the weakest rate in a year. The moderation in new export orders growth was also noteworthy amid tariff announcements," said Pranjul Bhandari, chief India economist, HSBC.

India is unlikely to escape the ire of US President Donald Trump, who has repeatedly raised the issue of India charging high tariffs on US imports. The reciprocal tariffs are likely to kick in from April 2.

Services activity is expected to disappoint falling to 57.7 in March compared with 59 in February.

“Manufacturing companies registered a faster upturn in new business from abroad than their services counterparts,” said the report.

Services companies also lagged manufacturing firms on job creation, as overall headcount addition declined to a six-month low.

The Flash PMI data is based on a survey from half the 800 enterprises from each of the sectors considered for the final data, which is released at the start of the month.