Although manufacturing business conditions continued to improve in August, latest data pointed to weaker rates of expansion for both output and new orders. On the price front, input costs decreased for the first time in six months and, subsequently, firms lowered their selling prices.

Elsewhere, post production inventories contracted at the sharpest pace since data were first collected in April 2005.

At 52.3 in August, down from July's six-month high of 52.7,  the seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index^TM (PMI^TM) - a  composite single-figure indicator of manufacturing performance - pointed to a further, although weaker, improvement in the health of the sector.

Underpinning the downward movement in the headline index were softer increases in output, new orders and stocks of purchases, whereas employment levels stagnated over the month.

Suppliers' delivery times, the remaining sub-component of the PMI, were broadly unchanged. Boosted by sustained demand growth, manufacturing production across India rose further in August. Although still solid, the rate of expansion eased since July and was below the long-run series average.

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