India's private sector growth has hit a three-year low in March due to the Iran war's impact on domestic demand, despite a record high in international orders.
HSBC's flash India Composite Purchasing Managers' Index (PMI) dropped to 56.5 in March, down from 58.9 in February, indicating a notable loss of momentum.
The manufacturing sector was particularly affected, with its PMI reading sliding to a four-and-a-half-year low of 53.8, while the services industry also lost ground.
The data highlights the risks to growth in India and globally from the Iran war, which has already slowed India's GDP growth rate to 7.8% last quarter.
Crude oil prices have soared over 40% since the war began, threatening to push inflation even higher and slow economic growth.
However, international orders have surged to a record high, with goods producers and service providers logging new business from clients across Asia, Europe, the Americas, and the Middle East.
Business optimism has hit its highest since September 2023, leading to the quickest pace of job creation since August.
