Manufacturing sector grew at its slowest pace in 25 months in November on sluggish pace of new business orders, a monthly survey showed today, strengthening the case for the RBI to keep the interest rates low. This also marks the fourth consecutive month of decline in the rate of Indian manufacturing output growth, as per the monthly Purchasing Managers' Index (PMI) survey conducted by Markit and Nikkei India.

The input cost inflation at the same time accelerated to the strongest since May, whereas factory gate prices were raised at a weaker rate that was marginal overall. PMI fell to a 25-month low of 50.3 in November, from 50.7 in October.

A reading above 50 marks expansion of the sector, while a score below this level means contraction. Among sub-sectors, consumer goods was the best performing category, while operating conditions at intermediate goods companies deteriorated for the first time since December 2013.

Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Economist at Markit and author of the report, said:"November PMI data point to tepid manufacturing growth across India, with gloomy domestic demand
resulting in the weakest expansion in production for 25 months.

Signs of the sector slowing have been building up, as growth of both new orders and output has eased in each of the past four months," she said.

The reading comes close on the heels of the RBI maintaining a status quo on interest rates.

With inputs from PTI