India's Manufacturing Purchasing Managers Index (PMI) declined to 53.9 in March 2026 from 56.9 in February, signaling continued expansion but at a slower pace. The moderation is attributed to the ongoing West Asia crisis which has disrupted supply chains and increased input costs, particularly for petroleum-based raw materials.

Despite the decline, the PMI remains above the 50-mark threshold that separates expansion from contraction, indicating resilience in India's manufacturing sector. New order growth slowed but remained positive, while export orders showed weakness amid global trade uncertainties. Input cost inflation accelerated due to higher crude oil prices, though manufacturers absorbed some costs rather than passing them fully to consumers. The reading suggests India's manufacturing sector continues to grow but faces headwinds from geopolitical tensions.