India's private sector activity slows to weakest level since October 2022. The HSBC Composite PMI declined to 56.5 in March from 58.9 in February, missing analyst expectations of 59.0. Manufacturing fell to 53.8, the weakest since August 2021, while services activity slowed to 57.2. Domestic demand weakened significantly, with new orders rising at the slowest pace in over three years despite record export order growth. Companies cite Middle East conflict volatility, rising cost inflation near four-year highs, and travel disruptions as key headwinds. Cost pressures are forcing businesses to absorb increases by reducing margins. India remains vulnerable to prolonged Middle Eastern tensions, which economists warn could persist and continue dampening economic growth across the region.
