As per a private survey, India's factory activity witnessed slowest growth in seven months in March owing to fresh lockdowns to curb the spread of rising coronavirus cases which dragged both domestic demand as well as supply lower. Also, at the same time the reduced activity propelled firms to reduce headcount. India today breached the 1 lakh mark in daily Covid 19 tally.
IHS Markit's Nikkei Manafucturing PMI was at a 7-month low of 55.4 in comparison to February's 57.5, nonetheless the levels are above 50 which separates contraction from expansion.
The factory output has gone down despite foreign orders registering growth at a continuing pace in March
"Survey participants indicated that demand growth was constrained by the escalation of the COVID-19 pandemic, while the rise in input buying was curtailed by an intensification of cost pressures," said Pollyanna De Lima, economics associate director at IHS Markit.
Levy of curbs again as asked by the Indian government may again dampen factory activity pace in April.
"With COVID-19 restrictions expanded and lockdown measures re-introduced in many states, Indian manufacturers look set to experience a challenging month in April."
Besides even as India, which is Asia's third largest economy was estimated to witness growth at a considerable pace this financial year, as per a Reuters poll, a majority of economists said a spike in coronavirus cases was the biggest risk.