Mumbai - Business conditions of India's manufacturing sector improved in January, but at a slower pace, key macro-economic data showed.
Consequently, the Nikkei India Manufacturing Purchasing Managers' Index (PMI), a composite indicator of manufacturing performance, fell to 52.4 from 54.7 in December 2017.
An index reading of above 50 indicates an overall increase in economic activity and below 50 an overall decrease.
"Following December's stellar performance, growth in the Indian manufacturing economy lost some impetus, reflected by slower growth in output, new orders and employment," said Aashna Dodhia, Economist at IHS Markit and author of the report.
"Nevertheless, these key PMI indicators registered in expansion territory
signalling the sector stayed on its track to recovery."
According to Dodhia, new export orders increased at the strongest pace since September 2016.
"A revision on rates of duty drawbacks on 102 items is expected to enhance India's international competitiveness, and possibly translate into stronger overseas demand over the coming months," Dodhia said.
"On the other hand, the Goods and Services Tax (GST) somewhat continues to remain a risk to business performance as firms faced further delayed payments."