After three months of growth, India’s manufacturing sector slowed sharply in April putting pressure on Reserve Bank of India to cut interest rates in quick succession.
The manufacturing activity slowed on the back of falling demand domestically as well as abroad, Nikkei India Manufacturing Purchasing Managers’ Index (PMI) showed.
The Index fell to a low of 50.5 in April from 52.4 in March, nearing the 50 mark that separates growth from contraction and the lowest reading of the year.
“PMI data for India show a marked slowdown in output expansion during April, as growth of new work ground to a halt following a robust increase in the prior month,” Pollyanna De Lima, Economist at Markit and author of the report said. “A softer overall increase in output prices meanwhile, suggests a strongly competitive environment, as cost inflation in fact accelerated to the fastest since May 2015.”
But on manufacturing jobs, the survey said, it remained broadly unchanged for the past two years.
Meanwhile, the government said it is taking measures to boost the manufacturing sector. These include start-up India initiative as well as Make in India programme under which 22 thrust sectors to provide major push to manufacturing have been identified.
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