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Informist, Wednesday, Mar. 25, 2026

 

NEW DELHI – India's growth is likely to see a significant slowdown in the March quarter compared to a quarter ago, dragged down by weak private sector activity, Pantheon Macroeconomics said in a report Wednesday. The long-term outlook for India, however, remains "unfazed", the UK-based economic research firm said.

 

GDP growth in the March quarter may fall to 6.1% from 7.8% in the December quarter, based on the Purchasing Managers' Index reports, economists at Pantheon said. The government's second advance estimate projects GDP growth in the current financial year ending Mar. 31 at 7.6%, which implies that the Indian economy will expand 7.3% in the March quarter.

 

The complete PMI for the March quarter backs "our downbeat call" for India's growth, the report said. In March, the flash composite PMI fell to 56.5, the lowest in close to three and a half years. Manufacturing PMI fell to a four-and-a-half-year low of 53.8 in March, while services PMI slipped to 57.2, the weakest since November 2023.

 

The composite PMI averaged 57.9 in the March quarter, much lower than 59.3 in the December quarter. A PMI reading of more than 50 denotes expansion in activity from the previous month, while a print below 50 indicates contraction. GDP growth has outperformed the PMI signal consistently since Q2 2024, the report said.

 

The economic research firm said its view of a slowdown in growth in the March quarter was "backed by the core industries readings", which point to "GDP growth of under 6.0%". The growth of India's eight core industries slowed to 2.3% in February from 4.7% in January.

"To be sure, India's PMIs have been flailing for some time since peaking in August last year, so the Iran crisis is merely adding insult to injury at this stage," the report said. Calling it the "only silver lining" in the latest flash PMIs, the report said, "it appears – for now – that corporate India doesn't expect this slump to persist."

 

Economists have lowered projections for India's growth in FY27 to around 6.5% due to sharply higher crude oil prices amid the US-Israel war on Iran. Meanwhile, S&P Global Ratings and Fitch Ratings have raised India's FY27 growth outlooks by 40 basis points and 30 bps to 7.1% and 6.7%, respectively. However, S&P said downside risks prevail in its forecast considering the current situation in West Asia and trade-related uncertainties.  End

 

Reported by Shweta

Edited by Avishek Dutta

 

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