India's manufacturing sector grew at a softer pace in March, defying expectations for further strong expansion, amid rising inflationary pressures, survey results from IHS Markit showed on Monday.
The headline IHS Markit manufacturing Purchasing Managers' Index, or PMI, fell to 55.4 in March from 57.5 in February.
Any reading above 50.0 indicates expansion in the sector. Economists had expected the reading to remain unchanged at 57.5.
Sales rose for the eight straight month in March and factory production expanded at a softer pace. New export orders continued to rise.
On the price front, the rate of inflation was the second-strongest in under three years. Selling prices and input costs increased in March.
Employment decreased in March and outstanding business rose marginally.
Business confidence remained positive in March on hopes that the coronavirus vaccine roll-out will curb the disease and underpin growth in the next 12 months.
"With COVID-19 restrictions expanded and lockdown measures re-introduced in many states, Indian manufacturers look set to experience a challenging month in April," Pollyanna De Lima, economics associate director at IHS Markit, said.
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