In March, India's dominant services sector contracted, a private survey showed, as new business and export demand fell sharply due to the COVID-19 pandemic that has disrupted economic activity globally.
The Nikkei/IHS Markit Services Purchasing Managers' Index (PMI) was down to a five-month low of 49.3 in March from February's seven-year high of 57.5. The index was below the 50-mark that separates growth from contraction, for the first time since October.
"Strong growth momentum seen so far in 2019 was halted in March as demand conditions deteriorated, particularly overseas, leading to a reduction in business activity," Joe Hayes, economist at IHS Markit, said in a release.
April's downturn is expected to be much more severe due to the 21-day nationwide lockdown announced by PM Narendra Modi to contain the spread of coronavirus, that has halted businesses selling non-essential goods.
The fall in economic activity mirrors a sharp deceleration in global activity as countries restrict movement to contain the spread of the coronavirus pandemic. The world economy is sliding into recession.
Last week, manufacturing activity PMI showed that factory output cooled to a 4-month low. The combined numbers have dragged the composite PMI to a five-month low of 50.6 in March.