Weighed by the slowdown in the services activity in March, the HSBC Flash India Composite Output Index, a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors, eased to 58.6 in March against a final reading of 58.8 in February.

Flash services PMI is an early estimate of the PMI for a country.

The services sector's index slipped to 57.7 in March compared with February's final figure of 59.0). On the other hand, flash manufacturing PMI was up at 57.6 in the reported month from 56.3 a month ago, according to the HSBC Flash India Purchasing Managers' Index (PMI) data released on Monday.

"The output index rose to its highest level since July 2024. Yet the margin squeeze on manufacturers intensified as input price inflation ticked up while factory gate prices rose at the weakest rate in a year," said Pranjul Bhandari, Chief India Economist at HSBC.

As per the report, there was a moderation in new export orders growth to a three-month low amid tariff announcements.

Business confidence remained strongly positive, but the overall level of sentiment slipped to a seven-month low in March over worries of stiff competition.