suffered its biggest one-month fall in nearly two years.
That pushed the output index down to its lowest level this year, although it remained comfortably above the 50 mark.
"The momentum in the manufacturing sector held broadly steady, with domestic demand countering a slowdown in export orders," said Leif Eskesen, chief economist for India & ASEAN at HSBC.
The survey also showed both input and output prices rose at their slowest pace in about a year. That is likely to provide some respite to policymakers after India's wholesale inflation hit a 3-month high in March.
The Reserve Bank of India left rates on hold at 8 percent last month.
The ruling Congress party's failure to revive the economy has turned the opposition Bharatiya Janata Party's pro-business leader Narendra Modi into the overwhelming favourite to head a new government after election results are announced in mid-May.