India manufacturing sector growth eased in the month of March 2026, amid market uncertainty and the war in the Middle East which led to softer increases in new orders and output. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell to 53.9 in March from 56.9 in February, marking its lowest level since June 2022.

On the inflation front, the report said input prices increased to the greatest extent in over three-and-a-half years, with higher prices of aluminium, chemicals, fuel, jute, leather, fabric, oil, rubber and steel. Despite the intensification in cost pressures, there was a slower increase in factory gate charges. The rate of output price inflation receded to a two-year low, curbed by customer-retention efforts and attempts to secure new clients at some firms.

The report further noted that Indian manufacturers recorded their strongest growth in export orders since last September, driven by increased demand from markets such as Australia, Brazil, Canada, China, Europe, Japan, the Middle East, Turkey, and Vietnam. Alongside this surge in external sales, firms expanded their workforce at the greatest extent in seven months and became more optimistic towards the year-ahead outlook for production.